32… · · 2016-09-20LEGISLATIVE TAX REVIEW COMMISSION MEMBER DIRECTORY Legislative Tax Review...

LEGISLATIVE TAX REVIEW COMMISSION MEMBER DIRECTORY

Legislative Tax Review Commission (Overall) & De-linkage Review Sub Committee

Chairperson: Senator Vicente "ben" Pangelinan: senbenp@guam .net

Point of Contact: Ms. Lisa Cipollone: [email protected]

Contact nos. 473-4236/37

Fax No. 473-4238

Legislative Tax Review Commission (Overall)

Vice Chairperson: Mr. David Sanford, [email protected]

Point of Contact: Ms. Jessica Reyes, [email protected]

Contact nos. 647-0220 I 0230 Fax No. 647-0800 or alternative no. 647-0816

Member

Acting Speaker Edward J.B. Calvo; [email protected]

Point of Contact Mr. Henry Cruz; [email protected]

Contact No. 475-8801

Fax No. 475-8805

Local Tax System Review Sub Committee

Chairperson: Senator Jesse Lujan; [email protected]

Point of Contact: Mr. Mike perez; [email protected]

contact nos. 64 7-5373175/76

fax no. 647-5377

Qualifying Certificates Review Sub Committee

Chairperson: Mr. Anthony Blaz; [email protected]

Point of contact: Ms. Eleanor Umagat ; eumagat@investguam .com

contact nos. 647-4332 X122

fax No. 649-4146

Gross Receipts Tax Review Sub Committee

Chairperson: Mr. Art I lagan, [email protected]

Point of Contact: Ms. ChristineBorJa, [email protected] or

Mr. John Camacho; [email protected]

Contact nos. 635-1815

Fax No. 633-2643

LEGISLATIVE TAX REVIEW COMMISSION MEMBER DIRECTORY

Member

ML David Ledger: dledger@carlsmith

TERRITORY OF GUAM

OFFICE OF THE GOVERNOR

AGANA, GUAM 96910

U.S.A.

EXECUTIVE ORDER NO. 87-6

CREATION OF THE GUAM TAX REFORM COMMISSION

WHEREAS. Section 1271 of the Tax Reform Act of 1986 allows the

Territory of Guam to enact its own tax code separate from the U.S~ Internal Revenue

Code: and

WHEREAS. delinkage from U.S. Internal Revenue Code provides the

Territory of Guam with the opportunity to develop tax legislation designed to meet

the revenue requirements of this government; and

WHEREAS.. a critical need exists to consider possible changes in the

Territory's real property. business privilege. use. and excise tax laws to reflect the

economic demands and social needs of the people of Guam; and

WHEREAS. the establishment of a committee of concerned and

knowledgeable citizens from the public and private sectors to review the existing

tax laws. and to make recommendations concerning appropriate revisions and

restructuring of such laws will be beneficial to the government and people of the

Territory;

NOW. THEREFORE. I. JOSEPH F. ADA. Governor of Guam. by virtue

of the authority vested in me by the Organic Act of Guam and the statutes of Guam.

do hereby establish a Guam Tax Reform Commission to be constituted and to function

as follows:

I. The Guam Tax Reform Commission shall consist of nine (9)

members.six {6}of whom shall be selected from the public sector

and three (3) of whom shall be selected from the private sector.

The members from the public sector shalf include the Lieutenant

Governor of Guam. who shall serve as the Commission's

Chairman. two [2) representatives from the Executive Branch

appointed by the Governor. and two (2] members of the Legislative

majority to be designated by the Speaker of the Legislature and one

(I) member of the Legislative Minority to be designated by the Minority

Leader. The three (3) from the private sector shall consist

of such representatives from the fields of law. accounting. commerce.

and from the public-at-large as the Governor shall select. All members

of the Commission shall serve without compensation.

2. The Commission may retain the services of such professional.

clerical and administrative staff as it deems necessary. The

hiring of any attorney shall be with the concurrence of the

Attorney General. The Department of Revenue and Taxation

shall furnish such additional support services to the Commission

as may be requested by the Commission and agreed to by the

Department.

3. The functions of the Commission are to;

(a) Develop an approach to taxation consistent with the economic

and social needs of Guam.

(b] Solicit input from the public on the proposed code and the

tax structure.

(c) Draft such proposed tax legislation as the Commission deems

appropriate with respect to other matters affecting tax

revenues.

11. The Commission shall prepare such documentation as deemed

necessary for submission to the U.S. Treasury pursuant to the

responsibilities of the U.S. Treasury in accordance with Section

1277 of the 1986 Tax Reform Act. The Commission shall submit

draft of the proposed code by December 31. 1989 to the Governor.

5. Executive Order 86-9 which created a Tax Advisory Committee is

hereby rescinded.

SIGNED AND PROt4ULGA TED in Agana. Guam~ on this

COUNTERSIGNED:

FRANK F. BLAS Lieutenant Governor

1987.

nor of Guam

OFFICE OF THE GOVERNOR GOVERNMENT OF GUAM

AGANA, GUAM 96910

EXECUTIVE ORDER NO. 86-9

CREATION OF THE GUAM TAX ADVISORY COMMITTEE

WHEREAS, proposed legislation has been introduced in the Congress

of the United States which would delink the Territory of Guam from the U.S. Internal

Revenue Code; and

WHEREAS, the possibility of such delinkage makes it necessary for the

Territory of Guam to develop tax legislation to replace the revenues that would

be lost through delinkage; and

WHEREAS, a critical need exists to consider possible revisions and

restructuring of the Territory's real property, business privilege, use, and excise

tax laws; and

WHEREAS, the establishment of a committee of concerned and

knowledgeable citizens from the public and private sectors tO review the existing

tax laws, and to make recommendations concerning appropriate revisions and

restructuring of such laws will be beneficial to the government and people of the

Territory;

NOW, THEREFORE, I, RICARDO J. BORDALLO, Governor of Guam,

by virtue of the authority vested in me by the Organic Act of Guam and the statutes

of Guam, do hereby establish a Guam Tax Advisory Committee to be constituted

and to function as follows:

1. The Guam Tax Advisory Committee (the Committee) shall consist

of twelve {12) members, six (6) of whom shall be selected from the public sector

and six (6) of whom shall be selected from the private sector. The members from

the public sector shall include the Director of Revenue and Taxation, who shall serve

as the Committee 1s chairman, and one representative to be selected by the Governor,

from each of the following government departments and agencies: Guam Economic

Development Authority. the Department of Law and the Department of Commerce.

The two (2) additional members from the public sector shall consist of members

of the Legislature who accept the Governor1s invitation to become members of the

Committee. The six {6} members from the private sector shall consist of such

representatives from the fields of law, accounting .. commerce, and from the public-at-

large as the Governor shall select. All members of the Committee shall serve without

compensation.

2. The functions of the Committee are to develop proposals and to

advise the Governor with respect to the following:

(a) Tax revenue measures to compensate for the loss of revenue

that would result if the Territory is delinked from the U.S. Internal

Revenue Code.

(b) Such revisions and restructuring of the real property, business

privilege, use and excise tax Jaws as will be in the best interests of the

Territory.

{c) Such other matters affecting tax revenues as the Committee

deems appropriate.

SIGNED AND PROMULGATED in Agana, Guam, on this_;5:..t:.:h'----

day of _ _;:_May=---~ 1986,

COUNTERSIGNED:

EDWARD D. REYES Lieutenant Governor of Guam

~\1 ichael \X/ M n l.itu!c"rJJnr Ct71>:'nwr

I-1orHJrabie Ed\'-''ard Jubmitted are st.'vcral issues L't)nccrn that h;:tve w be Llddrcsscd in order

and pur isbmJ However, l h'''" Bill No.

on Octob,:-r 1, 2(!07.

levels in critic-a! rwed c'ircr; 1 ;Hl

dcnL:tnd for '"'"Les.

Operational Shnr!fnHs

fnr mi!linn for tht" fiz.,cal yc"aL Cuts 10

pn'!J?J;lms JlllOW1t h> rnorc than

Bcahh: G\Hl Public Health \!ental I \1ental Uc;)lth

market as :1 hhmwt l\f th:: chronic structurcil lnlb:tLrnt-c that h~1s led to our si!tLtticif;_

-~'he deficii debt service demonstrates tJ1e

for the

l-Vithc>ut any initiativ-e 10 addn:"SS flk"" any rt:Ycnue cn!t'lnccmem

h> tbe the for our

of lhe 93 General '"''"'f'""','" Bond and thl: additional $115 However the indusion of FY

ihe int:\-it1bic whirh is the

fur 2007 vvhich has translated to the ""'""rn depn;ok nu"~''" session. The

as well as ccont>n:tisis COG at a Iirnt: when we ~tre for the

Cd!HlC1 'v\:C

rncnrbers

vision ;:md not a dirediun tb;-Jt m:1kes ;'lf nur dz;se!f :.Jo\v i:, the time ro

and more- susrnJnnb!e

to the deficit clinJ)n{ttiun d1r:. C('Vt:nucs, lht-: and the bcn1d CCH1Ltined in BiB 174 sh;:)\V t!ut '{;,_";;r

.'::(JI.f-, :his gcJvcmmcm \vill ;;ril_l h~ ddlc!t dose to milliz>rL This rerwe"'" that ccLdd incn::Ise if

mrnt''" the rt.:S[lU!l:'('i.: it [k'CdS tO meet both past ~md CUffC!lf Ul'ili,'ilUUfi0 eiirninari(m

! am

rnust hear s[H:~n ycJu \Ve are at the c.JT>S.'-roads \vhcre: \AiC

\vill reap the benefits of lht)St: s.::H.::rifl-::cs

\Vl:dh: )\JH have extended the dcihllmc fnr I he 'I'ax Review Ct.Jmmissi(m until June urge :you to that work possiible a1u:rnati,/es: to

in a manner.

;:ts many mernbers of the I rransmith;.d to you with

""mte have n.:"J'N reC\':ived the deficit e.Iirninatlon my revlscd Fi~caJ )-'ear 2008

encourage you to open discussio-ns to continue """""n" acc,cpanstc

tc prepare OlH fnr tlk':-

Il i;; '-mr !Jrcpare for criticaL But

these areas to meet the- curn::nt demand and to

"u'"'"'''\n, hcal\h and arc

functk>tb \\!thin the Guam Envirunmcnwl Pn:;t,_'.,:-lion the F'ut::dit: Health and Sc1cl~1l Sen rncnl nf Cu-..toms -:md

our Our I\ lore

environtn

prngc:rm in order ro b~1!anc::: ihe

The

,lnd hcneflt:;. our is!cmd of rlns investments

of ,c;,mli"'rnN:i nl0rtttoriun1 on rhe nnwnnn invc;.:tn;ent inccnti\tC and rhe

that Guurn c:1n usc to

may be ncccss;Jry to rcvi~it Fisc:JI ''{car 2008 budget The Fisc

BankofAmerica ~

~

iO:

From:

Hb.1, GFDC 1\ '\drnini:z1L1Wr (lElJCA Adnlinistrator

Director \'ice President

Cc: T11c Ht)l1(1Ctbl..: Fdix P, Cmwchn, Gov.::rnor rhe Honunible .\lichad \V Cnu, :vL!),. LL Governor The Honomble Scnct!OTS oft he Guam

fo J't:iit:nlk C>Ur Ct)lf1nlellf.S (JYCf tile !JS.t fe\V dl1} deficit bondS- should be )S-S.UCd in \:-Ornbination with :1 coherent fiscal tn dirnina1e the nccumulat'td ddidt and pn:vr.:nt aJditional defldts front Lack of an Jetkit reduction will nwJ(e J decent result ln increased interesl cc>s! ln the

lt is ,1.ppurent abs~Z-nt this ho1rnwinn the (lovcmmt'l1t has no t>) pl1y the3e debts :1.nd stup the interest accrual that i;; is ;dso i.lpp:U\'nt Hwi the tJf a

it) pay t>-tck the debt Si:T'lice cnntintk::s tn be ;l that {:armor be done ln a vccuum.

AullH)rizatlnn nf the as one of the .:ompoDcnts of a de:flcit reduclicn1 should demons.trale a dear inlt:!H :md curntnlt!nent to lht.: nnrket and to the people of Ciuam. l"he rest of the deficit ellmlnation \-vith the

whateve-r the final

It 1hc ckfi.cit hond ).,>,u is \A ith th""' \dm!rnstration and Ouarns best intt're\L /\dml:Ji:\tration and 1he

\Vc

'-'conomy, rs .m1horizcc! m1dt:1 d1c btili:'Gtnc::i Bond;;_ \\\; h.:Ucv""'\ th!:1 1s i1

;.:an 1hcn v.ork n; -,rhe-t;;bl,: Jnd in

the iS

1h-c l iJ 1)3 (}cncr:Jt hut it ckns nz>t address 1hc

V./ith n.::srk~tl 10 sor-:ne ,)f tht..~ m'"''""'" in the P"'l"''"d lt:g::lati,ln ;,tnd structure in wd! :b the oth;;r tr:msactiun p;ir;::Jm;;krs, until we h:1vc a t \vi!l alhwv us to stmcturc tht' reconm"ll:nd thal S(:me or the

around the (_i~v,_-z;mmcnt's m:cJs, In are indudr::d in any dt:f!cit

rcdut:linn con ,\'Jjz:rcd lb~ Gcncrnrn-e:n! and the Tht:;;;.:: Include Em cap b: :-:cJ on ::md/ur :1cftnl rcYermcs

*UBS

2!,2007

\--1r. 'ronv Bla1

\!;:;. fina c~J.rcia /\dministnttur

lTC

UBS, as the Ame-rica's m:1rkeilnP

Frank X. Lauk'rbur

cc:

bcmd of

!'alan,,c it h(lS li:ced, Whik !he nr'""'"''d that z-;1rtn.::turc alone will nut lead (iumn b:h:k fo Lin in\\~Slmt:nt

\ ~;

Jamc.:) r::. SLoH Executive Dii:eetor

Russell ( __ r:;xc>:Hfive Director

\k Allll1nos Blat A.drr;inisrr::tor

Suite 5 J

Tetmw1in~, Gu:1m 96913

Dear

ckvcior>m,:nt of a

We believe: the iirst s!Cp in the proccs:+ of f.ielSS;lgt~ nf a "t'nmd wols w uddrcss tht

tl!rt:m! continue reducrkn1 pbn :md look fZ>t"\>,:mi to prc:centinll that fad!itarc that

!lid NkJ--wlas G" Fluehr

""""'"'"" Diredor C~h)b-al \brkcts Inc.

JOt) Grccrnvkh Srn:d. -~t:w York. ~'-iY Ji;OU Tel:C Fmai I: nicbylas .. kJh.,,JJL)J.;:jli

I i\!liNA'BENTE NUEHI Nil LIHESLAHIRAN GUliHAN 2007 (FIRST} Regular Session

is to certify that Bill No. 174 (fCJ, "AN ACT MAKING APPROPRIA TlONS fOR THE OPERATIONS OF THE EXECUTIVE, LEGISLATIVE AND JUDICIAL BRANCHES OF THE GOVERNMENT OF GUAM FOR THE YEAR

SEPTEMBER 30, 2008, MAKING OTHER APPROPRIATIONS, AND ENACTING MISCELLANEOUS AND ADMJNISTRA TIVE PROVISIONS," wns on day

Acting Speaker

FELIX P. CAMACHO J

Public

)

2

3

4

5

6

7 !

8

9

10

ll

12

!3

!4

15

16

17

18

19

20

01

""''

24

'vlanagement by Section Uj) of Part I of Chapter V of this Act may be expended

the Departrnent s operanons.

Section 34. Section 49, Vf of Public is amended to

'Section 49. Hcvicw of Business Privilege Each

business tax exemption authorized in 26203 of 1 l

shall be evaluated Legislative Review Commission pursuant to

Chapter !I of 2 GCA, using the principles of economic efficiency, equity,

simplicity, administrative feasibility, accountability and regarding the

puq.mse t)f economic growth. The Commis,;ion shall provide its evaluation

of said exemptions and make recommendations [()r pennanent repeal or

reauthorization thereof to [ Maga 'lahen ()u/ilum and I Liheslatura no later

than June 1, 2008."

Section 35. 20 101 of Chapter 20 of Iitle ll tbe Guam Code

Annotated is amended to read:

"20 I HI. Realty Conveyance: Amount. A tax is established on all

deeds, instruments, or writings whereby any lands, tenements,

or other realty sha!I be sold, granted, or

or purchasers, or to any other person or persons designated by

such purchaser or purchasers, as Two Dollars und

1$2.50) fclr each ' . Thousand Dollars ($1 ,000.00) or fmction thereof on

the true consideration or value received for such . Provided, th3t in

of encumbered property, the tax shall be collected on the net amount of

the consideration aJkr deducting the amount of the encumbrance."

Section J6. Transfer of Employees. Notv.-'ithstandi ng or her

26 provision nf law, and in recognition of personnel shortages in cet1.ain areas, I

Section 73. Temporary Moratorium on Qualifying Certificates. A

nhnatoritnn is hereby on the issuance new

Certificates pursuant to Cb;lpter 58. Title 12 GCA and the Guam Economic

4 Development

5

6 1nstmmce

7

or renew

'II ''/r1t 0 p"1Y' t' ,) Ld i( q tJi (,,

Guan1 or

shall

rcecommendatinns re b the Qualif}ing

9 Certitkate Program to I

,) 0 moratorium shall ( 60) days afler the

l ! July 31, "''J'Jo, whichever comes first

12 Section 74. l 0108, Chapter ! 0 Title 4 GCA is hereby

13 "I 0Hl8. Appropriate Employee lJnils.

14 recognition requested by quali !led employees or organizations, appropriate

15 of

16 on any as dcparlmenta,l, functional, or other

17 basis, ich will assure a clear and identifiable community or m 18 unit >hall

l9 which indudes both govemment managerialo

clerical

21 nor shall a unit established which includes bmh

11 rnajority of

employees vote inclusion in such

Section A.ppropriation to the Department of :\griculture.

appropriated to Dcpmimcnt of Agriculture in Public Law for

26 purpose of hiring an Assistant Attorney to in the prosecution

106

2 GCA LEGISLATIVE BRAi'OCH Cu. 11 LEGISLATIVE TAX REVIEW COMMISSIOi'O

CIIAPH:R ll

LEGISLATIVE TAX REVIEW COMMISSION

SOURCE: This Chapter was enacted in its entirety by P

2 GCA LEGISLATIVE BRANCH CH. 11 LEGISLATIVE TAX REVJEWC0,'\1MISSION

its members. Quadrennial Commission members shall receive no stipends but shall be reimbursed for actual expenses incurred in the performance of their duties, subject to submission of documentation and approval by the chairperson of the Committee that houses the quadrennial Commission. The quadrennial Commission shall meet from time to time, as determined by the chairperson, to execute its duties.

11103. Membership.

The Director of the Department of Revenue and Taxation or its successor agency, the Administrator of the Guam Economic Development and Commerce Authority or its successor agency, the Senator who chairs the Legislative Committee with oversight over Guam tax policy, the Senator who chairs the Legislative Committee with oversight over budgetary matters, and the Minority Leader, or designee, shall be standing members of the quadrennial Commission. Should oversight over Guam tax policy and budgetary matters fall under the same Legislative Committee, the Speaker shall serve as a standing member of the quadrennial Commission. The five (5) members appointed by the Speaker shall meet the following criteria:

(a) One (I) shall be a Certitied Public Accountant, selected from among three (3) names submitted by the Guam Society of Certified Public Accountants;

(b) One (I) shall be an attorney specializing in tax laws, selected from among three (3) names submitted by the Guam Bar Association;

(c) One (I) shall be an economist who is currently employed in a field of economics and who has a doctorate degree in economics from an accredited institution of higher learning;

(d) One (I) shall be a representative of the business community who is a business owner, selected !rom among three (3) names submitted by the Guam Chamber of Commerce; and

(e) One (I) shall be a representative from the public at large who does not fall into any of the other categories listed in this Subsection.

11104. Vacancy.

Ifany vacancy occurs in the appointed membership of the quadrennial Commission prior to the completion of its duties or dissolution, the Speaker shall appoint a replacement member in accordance with Ill 03 of this Chapter.

2

2 GCA LEGISLATIVE BR--\NCH CH. 1 J LEGISLATIVE TAX REVIEWC0.\1_\tiSSION

11105. Government Cooperation.

Government of Guam agencies and departments, including autonomous entities, shall make available to the quadrennial Commission on a timely basis such data and technical support as is necessary for it to perfom1 its duties as provided in this Chapter.

11106. Contractual Services and Funding for Quadrennial Commission.

Should data and technical support necessary to accomplish its duties as provided in this Chapter be unavailable from government of Guam entities and/or personnel, I Liheslatura [the Legislature J may enter into contractual agreements with private consultants as it deems necessary to perform those duties, giving preference to those currently licensed to do business in Guam. I Liheslatura shall approve the funding of the quadrennial Commission.

11107. Duties.

The quadrennial Commission shall conduct a systematic review and evaluation of Guam's tax structure and tax policies, using such standards as set forth in Ill 00 above. The quadrennial Commission shall compare Guam's tax code, rates and fees to other similar jurisdictions within the United States. No later than one (I) year after its initial meeting, the quadrennial Commission shall submit to I Maga '/ahen Gu!ihan [the Governor] and I Lihes/aturan Gu!ihan [the Legislature] its evaluation of the island's tax structure, and its revenue and tax policy recommendations, including recommendations for adjustment of tax rates and fees, removal of existing taxes and fees, and draft legislation relative to such recommendations.

11108. Dissolution.

Each quadrennial Commission shall dissolve upon Legislative action on all of the recommendations made to the Legislature to which it submits its evaluation and recommendations required by this Chapter, or upon the adjournment sine die of that Legislature, whichever comes first.

3

'~-~~~--,-~-~~-~--

Felix P. Camacho Governor

P.O. Box 1.9_)0 Hagiitfia, Guam 96932 TEL: (6;t) 472-8931 FAX: (671) 477-4826 ElviAIL: [email protected]

Michael W Cruz, M.D Lieutenant Governor

The Honorable Mark Forbes Speaker Mina 'Beme Nuebi Na Liheslaturan Gu!ihan !55 Hessler Street Hagatiia, Guam 9691 0

Dear Mr, Speaker:

This is to inform you that I have signed into law Bill 74 and, is now Public Law 29-02 but not without certain reservations, After much deliberation and debate, the 291h Guam Legislature passed and transmitted Bill No. 74, I believe we both recognize that the version passed by the Legislature is substantially different from the original Bill which I transmitted to you on March 22, 2007. Clearly, any changes and amendments to the original bill is the prerogative of the Legislature but, I was hopeful that we could reach a consensus on provisions of Bill 7 4 where we had differences of opinion on.

Since receiving the transmittal of Bill No. 74, my Administration and the government's financial advisors, Bane of America Securities, have been reviewing and analyzing the impact an enactment or veto of this legislation would have on this government and, the services it is mandated to deliver to tbc people of Guam. While there have been concerns expressed regarding the final version of this bill, it is the assessment of this Administration that a veto of the bill would cause greater hann to the future viability of this government and, its ability to deliver critical services to the people of Guam.

Therefore, more work must be done for which we can reach a consensus to ensure the continued viability of this govemment in it's delivery of services to those most in need and, perhaps of equal importance, to preserve and enhance our creditworthiness to those who would assist us in our fumre efforts. This is essential as we embark on what will be a monumental effort to demonstrate fiscal stability, eventually eliminate our deficit and, to prepare futnre generations for the growth that we all know is sure to come.

Our actions today, our willingness to transcend our differences, the choices we make must be made in the framework for what is best for the future of our island, her people and most importantly, for future generations. Bill 74 is the beginning of this journey but, surely it is not the end. It is my sincere hope that what was not addressed in Bill 74 will

)

The Honorable Mark Forbes }vfina 'Bente Nuebi na Liheslaturan GuGhan Page Two

be addressed in our revised FY '08 budget. We must continue our endeavor to strengthen our finances, be able to immediately provide for emergencies and unforeseen circumstances, all while continuing to provide critical services and, finally to eliminate our cumulative and crippling deficit.

Although Bill 74 does contain revenue enhancements and reduced expenditures, it still is not sufficient. \Ve must continue to take the necessary steps to increase revenues, reduce unnecessary expenditures while at the same time not compromise this government's ability to deliver existing service levels onr people demand and are entitled to. It is in this spirit that we must work together to make the hard but, necessary decisions regarding the levels of revenues and expenditures within this government, legal mandates the government is now required providing within our financial means and resources.

I committed to the people of Guam, the government employees and the businesses which they patronize that the furlough of government employees would be the option of last resort. Today, while I still stand by that commitment, government agencies are reviewing their operational and personnel levels, prioritizing their agency mandates and putting plans in place to adjust to their operations based on the final authorized levels to their budgets contained in Bill 74.

I must however, express my disappointment that these adjusted levels are not equitable and that the actions of the Guam Legislature to exempt certain branches and agencies from some level of reductions have created an even greater disparity even among the critical services of health, safety and education. Consequently, these actions could reach potentially crippling levels.

It is apparent that the anticipated impact of a near! y 25% cut to agency budgets is too great to sustain current services and employment levels as well. Agencies throughout this government have put together plans to prioritize the delivery of certain services and identify the services that will cease for the remainder of this fiscal year.

It has been a long and bard process that bas brought us to this point. Given the instability in the financial condition of this government, and the inadequate level of revenues to deliver all the services mandated by law even with the revenue enhancements in Bill 74, I am left with no option but to sign Bill No. 74 into law and allow the directors of the Executive line agencies to begin the process of identifying the reduction of operational and personnel levels accordingly.

As we adjust operational levels through the remainder of this fiscal year, I strongly urge the members of the 29'h Guam Legislature to carefully consider the challenges that lay ahead. Given the unforeseen financial burdens that have come upon this government in

The Honorable Mark Forbes Alina 'Bente Nuebi na Liheslaturan Gu&han Page Tbree

the form of prior years' EITC payments in the amount of $90 million, the COLA court judgment of $123 million, the $209 million deficit inherited by my Administration (which includes income tax refunds, debts to the Retirement Fund, to GP A and, to government vendors) coupled with funding the operational needs of every agency to deliver all legally mandated services, it is incumbent upon us to find a workable solution to the large deficit we now face.

In light of these realities, if unfunded mandates must be eliminated then we must do so. Wl:tat is required at this critical time is a structural change in the levels of service this government is required to deliver and bring these services and mandates in line with the revenue levels this government is expected to receive.

There are though, positive provisions as a result of Bill 74. Principally, the increase in certain fees the government charges, some of which were not adjusted in over fifty-five (55) years. Clearly, the need to recover the cost of providing those specific services is not only justified but, critical to this government's ability to continue delivering existing levels of service. The willingness of the Legislature to restore the Dave Santos Act to its original levels (consistent with its original intent) and, to adjust the level of exemptions shows your confidence in an economy on the front-end of strong growth while recognizing that these industries are mature and that tax exemptions and incentives are no longer needed to continue to operate profitably.

While these measures all have a positive affect on the revenues upon which this government operates, more must be done to expand our revenue base to reflect the true level of business activity that is occurring on island. Both the Department of Interior and Standard & Poor's have recognized that the level of business privilege tax exemptions that this government allows have heen detrimental to the government's capacity to deliver services. Suppressing revenues at a time when our island is demanding greater service levels and as we prepare for even greater increases in demands for services that will surely come with the military build-np, only aggravates the situation and requires that we address these very issues in the upcoming Fiscal Year 2008 budget.

Furthermore, studies provided by both the Department of Interior and the Office of Management and Budget have recognized that tax exemptions do not, in and of themselves, encourage or increase investments to the extent that will make up for lost revenues. According to those reports, businesses look for investment opportunities based on the potential for profitability over the long-tenn and the quality of life for those they will employ. Exemptions are not the deciding factor and their influence on the final decision to invest is not as strong as commonly believed.

The Honorable Mark Forbes Afina 'Bente Nuebi na Liheslaturan GuJhan Page Four

While I thank the members of the 29'h Guam Legislature for their willingness to address the need for additional revenues, I also urge you to seriously consider substantial expansion of the revenue-base in the Fiscal Year 2008 budget through a review of all Business Privilege Tax exemptions currently provided for in the law.

In addition, there are several concerns that I ask the Legislature to consider for possible corrective action.

Chapter VI; Section 7 Use of funds received through the public welfare assistance program for the purchase of alcoholic beverages and tobacco products.

It is important to note that welfare recipients can obtain cash from their Quest card at the A TM and make prohibited purchases. The department however is working with the vendor to restrict access to cash.

Also note the bill does not mention where the money from the business tlnes imposed in Section 7 will be deposited.

Chapter VI; Section II amends 10 GCA 51503 to add subsection b to authorize DPW to expend monies in the Recycling Revolving Fund for the Island-Wide Collection and off-island Disposal of Abandoned Vehicles, etc.

The cost for the on-going Island-Wide Collection and Off-Island Disposal of Abandoned Vehicles, White Goods, Tires, and Batteries exceeds the current revenue source but even with this additional revenue source there are insuftlcient funds to support the entire cost of the project which we know is essential to protect our environment, not just for today but for future generations to enjoy.

Chapter VI: Section 29 Oftlce of Finance and Budget

Section 13108 establishes the Special Economic Service. Membership of the Special Economic Service include the Senior Economist of the Department of Labor and the Chief Planner of the Bureau of Statistics and Plans, however, these positions should be entitled Chief Economist for both agencies.

Chapter VI: Section 46 Positions

Prohibition on the Use of Appropriations to Fill Vacant

Subsection f does not accommodate academic personnel of the University of Guam and the Guam Community College. This is problematic for the Guam Community College as they are in the process ofhiriug their president for the college.

The Honorable Mark Forbes Afina 'Bente Nuebi na Liheslaturan Guiihan Page Five

Finally, while the May JO'h deadline for a revised Fiscal Year 2008 budget has passed, given the significant impact Public Law 29-02 on FY2008, we are unable to provide the revised budget submission at this time. The revised Fiscal Year 2008 budget will be submitted once it is completed and, the effects of Bill 74 are fully taken into account.

Sinseru yan Magahet,

FELIX P. CAMACHO

I Maga 'lahen Guahan Governor of Guam

cc: The Honorable Ray Tenorio Senator and Secretary of the Legislature

Attachments

I MINA'BENTE NUEBI NA UHESLATURAN GUAHAN 2007 (I

department or agency of the government of Guam shall be subject to layoff or

2 furlough before the following categories of employees within said department or

3 agency have been first subjected to layoff or furlough. All layoff or furlough

4 actions shall be imposed in the following order:

5 1. Part time, short term or seasonal employees (unclassified employees

6 shall be considered short term or seasonal);

7 2. Provisional employees;

8 3. Temporary or limited term employees; and

9 4. Probational (initial) employees.

10 Section 49. Review of Business Privilege Tax Exemptions. Each business

11 privilege tax exemption authorized in 26203 of 11 GCA shall be evaluated by the

12 Legislative Tax Review Commission pursuant to Chapter 11 of 2 GCA, using the

13 principles of economic efficiency, equity, simplicity, administrative feasibility,

accountability and regarding the purpose of economic growth. The Commission

15 shall provide its evaluation of said exemptions and make recommendations for

16 permanent repeal or reauthorization thereof to I Maga'lahen Guahan and I

17 Liheslatura no later than September 1, 2007.

133

P.O. Box 2950 Hag.ltiia, Guam 96932

Tlili (671) 472-8931 FAJC (671) 477-4826 Eli!.A.J[, -!'mai!.gov.gu

Felix Perez Camacho Gowrnor

Kaleo Scott Moylan Lieut..-Gr=mrr

The Honorable Vicente C. Pangelinan Speaker l Mina 'Bente Siete Na Liheslaturan Guahtin Twenty-Seventh Guam Legislature 155 Hesler Street Hagatfia, Guam 96910

Dear Speaker Pangelinan:

'"~''--" ui we Peopk 1 Speaker v1cente fhaDJ c. P'll 'kq 3

JAN 0 5 2fJ04 TIME:e?: VI ( JAM f -ti'Jf RECEIVEDBY:r

0 5 JAN 2004

Transmitted herewith is Bill No. 182 (COR), "AN ACT TO ADD A NEW CHAPTER I! TO TITLE 2, GUAM CODE ANNOTATED, TO CREATE A LEGISLATIVE TAX REVIEW COMMISSION TO BE APPOINTED BY THE SPEAKER OF I L!HESLATURAN GUAHAN IN JANUARY, 2004, AND EVERY FOUR (4) YEARS THEREAFTER, TO EVALUATE THE ISLAND'S TAX STRUCTURE, AND TO SUBMIT REVENUE AND TAX POLICY RECOMMENDATIONS AND DRAFT LEGISLATION TO I MAGA 'LAHEN GUAHAN AND I LIHESLA TURAN GUAHAN WITHIN ONE (I) YEAR," which I signed into law on December 17, 2003, as Public Law No. 27 56.

Bill No. 182 establishes a Legislative Tax Review Commission to make long-term recommendations that will he the centerpiece of a complete tax system that fits the needs for Guam. I would like to thank Senator Antoinette P. Sanford for implementing the recommendation by my Ta'l Conversion and Reform Commission. I am certain to see tax recommendations that will benefit Guam, however, we need to work together to ensure that the historic data required to make systemic changes are being collected and done so regularly. There is much work that needs to be done to examine the method in which current taxes are assessed and collected, and increasing and improving collection activities within the Department of Revenue and Taxation. I sign this bill confident that this will be done for the best interest of the people of Guam.

Sincerely yours,

~,.~----FELIX P. CAMACHO l Maga '!Jhen Guiihan Governor of Guam

Attachment: copy attached of signed bill

cc: The Honorable Tina Rose Muna-Barnes S~'llator and Legislative Secretary

_1)67 - - --

I MINA'BENTE SIETE NA LIHESLATURAN GUAHAN 2003 (FIRST) Regular Session

CERTIFICATION OF PASSAGE OF AN ACT TO I MAGA'LAHEN GuAHAN

This is to certify that Bill No. 182 (LS), "AN ACT TO ADD A NEW CHAPTER 11 TO TITLE 2, GUAM CODE ANNOTATED, TO CREATE A LEGISLATIVE TAX REVIEW COMMISSION TO BE APPOINTED BY THE SPEAKER OF I LIHESLATURAN GuAHAN IN JANUARY, 2004, AND EVERY FOUR (4) YEARS THEREAFTER, TO EVALUATE THE ISLAND'S TAX STRUCTURE, AND TO SUBMIT REVENUE AND TAX POLICY RECOMMENDATIONS AND DRAFT LEGISLATION TO I MAGA'LAHEN GliAHAN AND I LIHESLATURAN GuAHAN WITHIN ONE (1) YEAR," was on the 6th day of December, 2003, duly and regularly passed.

Tina ose una Barnes Senator and Leg slative Secretary

vicente (ben) c. pangelinan Speaker

. . . . . . . . . . . . . . . . . . . . . . . . .. . . . . ........... -.......... -........ -. . lrlll:.. . . . . . . . . . . . . . . . . . . . . .. -. . . . . . . . . . . -JJ. n .. This Act was received by I Maga'lahen Guilhan this ~day of December, 2003, at _I_:)_ I!

o'clock _ _E .M. i Jw] __ _ antSta~

APPROVED:

~C)(t:;;; ~Ac:o I Maga'lahen Guahan

/.?-" Jl7/{,l r r

Date:

Public Law No. _27-56 _____ _

I MINA'BENTE SIETE NA LIHESLATURAN GUAHAN 2003 (FIRST) Regular Session

Bill No. 182 (LS) As amended on the Floor.

Introduced by: Toni Sanford v. c. pangelinan Mark Forbes---F. B. Aguon, Jr. J. M.S. Brown F. R. Cunliffe C. Fernandez L. F. Kasperbauer R. Klitzkie L. A. Leon Guerrero ]. A. Lujan T. R Mufia Barnes J. M. Quinata R ]. Respicio Ray Tenorio

AN ACT TO ADD A NEW CHAPTER 11 TO TITLE 2, GUAM CODE ANNOTATED, TO CREATE A LEGISLATIVE TAX REVIEW COMMISSION TO BE APPOINTED BY THE SPEAKER OF I LIHESLATURAN GUAHAN IN JANUARY, 2004, AND EVERY FOUR (4) YEARS THEREAFTER, TO EVALUATE THE ISLAND'S TAX STRUCTURE, AND TO SUBMIT REVENUE AND TAX POLICY RECOMMENDATIONS AND DRAFT LEGISLATION TO I MAGA'LAHEN GUAHAN AND I LIHESLATURAN GUAHAN WITHIN ONE (1) YEAR.

1 BE IT ENACTED BY THE PEOPLE OF GUAM:

1

1 Section 1. Legislative Findings and Intent. I Liheslaturan Gudhan

2 finds, as did I Maga'lahi's Tax Commission, that there is insufficient data to

3 make an informed and logical decision concerning converting the Guam

4 Gross Receipts Tax to a sales tax, or revision of Guam's applicable tax laws.

5 It is the finding of I Liheslatura that the taxes and fees assessed and charged

6 by the government of Guam are in urgent need of review and revision.

7 I Liheslatura further finds that without appropriate guidelines in

8 place, I Lilzeslatura has, in the past, acted precipitously on numerous

9 occasions relative to tax policy, including preventing a mandated property

10 tax increase, abrogating its Organically mandated responsibility to enact

11 taxes and allowing the fiscal condition of the government to deteriorate to

12 a state such that an increase in taxes without proper research and valid

13 information became a necessity.

14 It is, therefore, the intent of I Liheslatura to create a Legislative Tax

15 Review Commission ("Commission") to be appointed on a quadrennial

16 basis, to review and make recommendations concerning Guam's tax

17 policies and structure. This ten (10) member quadrennial Commission is

18 empowered to collect and analyze such data as it deems appropriate to

19 substantiate its studied recommendations to I Liheslatura, as a basis for

20 appropriate changes in Guam's tax policy and structure necessary to

21 implement the economic objectives of the government of Guam.

22 It is I Liheslatura' s intent that this quadrennial Commission be

23 allowed one (1) year to perform its tasks and submit its recommendations,

24 after which it will cease to exist, until a new quadrennial Commission is

25 appointed in the quadrennium.

2

1 It is additionally the intent of I Liheslatura that this Legislative Tax

2 Review Commission becomes the subject of an amendment to the Organic

3 Act of Guam.

4 Section 2. A new Chapter 11 is added to Title 2, Guam Code

5 Annotated, to read:

6 "CHAPTER 11

7 LEGISLATIVE TAX REVIEW COMMISSION

8 11100. Legislative Intent.

9 11101. Establishment of Legislative Tax

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

11102.

11103.

11104.

11105.

11106.

11107.

11108.

11100.

Review Commission.

Administration.

Membership.

Vacancy.

Government cooperation.

Contractual Services and Funding for

Commission.

Duties.

Dissolution.

Legislative Intent. I Liheslaturan Guahan intends

that the Legislative Tax Review Commission, after appointment and

confirmation, shall conduct a systematic review of Guam's tax

policies and statutes each quadrennium, using the principles of

economic efficiency, equity, simplicity, administrative feasibility,

accountability and for the purpose of promoting economic growth

3

1 and shall submit to l Maga'lahen Guahan and to I Liheslaturan Gutihan

2 an evaluation of Guam's tax structure with recommendations for any

3 changes in revenue and tax policy deemed necessary.

4 11101. Establishment of Legislative Tax Review

5 Commission. There is hereby established a Legislative Tax Review

6 Commission, hereinafter 'the Commission.' The quadrennial

7 Commission shall consist of ten (10) members as provided by this

8 Chapter, five (5) of whom shall be appointed by the Speaker. The

9 appointments to the first quadrermial Commission shall be made and

10 submitted to I Liheslaturan Guahan no later than the last day of

11 January, 2004. The next Commission shall be constituted in January

12 2007 and the Commission shall be reconstituted every four (4) years

13 thereafter.

14 11102. Administration. For administrative purposes,

15 clerical support and necessary funding, the quadrennial Commission

16 shall be housed at I Liheslaturan Guahan with the Committee that has

17 oversight over tax policy in Guam. The quadrennial Commission

18 shall select a chairperson from among its members. Quadrennial

19 Commission members shall receive no stipends but shall be

20 reimbursed for actual expenses incurred in the performance of their

21 duties, subject to submission of documentation and approval by the

22 chairperson of the Committee that houses the quadrennial

23 Commission. The quadrennial Commission shall meet from time to

24 time, as determined by the chairperson, to execute its duties.

4

1 11103. Membership. The Director of the Department of

2 Revenue and Taxation or its successor agency, the Administrator of

3 the Guam Economic Development and Commerce Authority or its

4 successor agency, the Senator who chairs the Legislative Committee

5 with oversight over Guam tax policy, the Senator who chairs the

6 Legislative Committee with oversight over budgetary matters, and

7 the Minority Leader, or designee, shall be standing members of the

8 quadrennial Commission. Should oversight over Guam tax policy

9 and budgetary matters fall under the same Legislative Committee,

10 the Speaker shall serve as a standing member of the quadrennial

11 Commission. The five (5) members appointed by the Speaker shall

12 meet the following criteria:

13 (a) One (1) shall be a Certified Public Accountant,

14 selected from among three (3) names submitted by the Guam

15 Society of Certified Public Accountants;

16

17

18

19

20

21

22

23

24

(b) One (1) shall be an attorney specializing in tax laws,

selected from among three (3) names submitted by the Guam

Bar Association;

(c) One (1) shall be an economist who is currently

employed in a field of economics and who has a doctorate

degree in economics from an accredited institution of higher

learning;

(d) One (1) shall be a representative of the business

community who is a business owner, selected from among

5

1

2

3

4

5

6

three (3) names submitted by the Guam Chamber of

Commerce; and

(e) One (1) shall be a representative from the public at

large who does not fall into any of the other categories listed in

this Subsection.

11104. Vacancy. If any vacancy occurs in the appointed 7 membership of the quadrennial Commission prior to the completion

8 of its duties or dissolution, the Speaker shall appoint a replacement

9 member in accordance with 11103 of this Chapter.

10 11105. Government cooperation. Government of Guam

11 agencies and departments, including autonomous entities, shaH make

12 available to the quadrennial Commission on a timely basis such data

13 and technical support as is necessary for it to perform its duties as

14 provided in this Chapter.

15 11106. Contractual Services and Funding for Quadrennial

16 Commission. Should data and technical support necessary to

17 accomplish its duties as provided in this Chapter be unavailable from

18 government of Guam entities and/or personnel, I Liheslatura may

19 enter into contractual agreements with private consultants as it

20 deems necessary to perform those duties, giving preference to those

21 currently licensed to do business in Guam. I Liheslatura shall approve

22 the funding of the quadrennial Commission.

23 11107. Duties. The quadrennial Commission shall conduct a

24 systematic review and evaluation of Guam's tax structure and tax

25 policies, using such standards as set forth in 11100 above. The

6

1 quadrennial Commission shall compare Guam's tax code, rates and

2 fees to other similar jurisdictions within the United States. No later

3 than one (1) year after its initial meeting, the quadrennial

4 Commission shall submit to I Maga'lahen Gwihan and I Liheslaturan

5 Guahan its evaluation of the island's tax structure, and its revenue

6 and tax policy recommendations, including recommendations for

7 adjustment of tax rates and fees, removal of existing taxes and fees,

8 and draft legislation relative to such recommendations.

9 11108. Dissolution. Each quadrennial Commission shall

10 dissolve upon Legislative action on all of the recommendations made

11 to the Legislature to which it submits its evaluation and

12 recommendations required by this Chapter, or upon the adjournment

13 sine die of that Legislature, whichever comes first."

14 Section 3. Severability. If any provision of this Act or its 15 application to any person or circumstance is found to be invalid or contrary

16 to law, such invalidity shall not affect other provisions or applications of

17 this Act which can be given effect without the invalid provisions or

18 application, and to this end the provisions of this Act are severable.

7

2 GCA LEGISLATIVE BRANCH Cn. 11 LEGISLATIVE TAX REVIEW COMMISSION

CHAPTER 11 LEGISLATIVE TAX REVIEW COMMISSION

SOURCE: This Chapter was enacted in its entirety by P.L. 27-56:2.

11100. 11101. 111 02. Ill 03. 11104. 11105. Ill 06. 111 07. 11108.

Legislative Intent. Establishment of Legislative Tax Review Commission. Administration. Membership. Vacancy. Government Cooperation. Contractual Services and Funding for Commission. Duties. Dissolution.

11100. Legislative Intent.

I Liheslaturan Guahan [The Legislature] intends that the Legislative Tax Review Commission, after appointment and confirmation, shall conduct a systematic review of Guam's tax policies and statutes each quadrennium, using the principles of economic efficiency, equity, simplicity, administrative feasibility, accountability and for the purpose of promoting economic growth and shall submit to I Maga 'lahen Guahan [the Governor] and to I Liheslaturan Guahan [the Legislature] an evaluation of Guam's tax structure with recommendations for any changes in revenue and tax policy deemed necessary.

11101. Establishment of Legislative Tax Review Commission.

There is hereby established a Legislative Tax Review Commission, hereinafter 'the Commission.' The quadrennial Commission shall consist of ten (10) members as provided by this Chapter, five (5) of whom shall be appointed by the Speaker. The appointments to the first quadrennial Commission shall be made and submitted to I Liheslaturan Guahan [The Legislature] no later than the last day of January, 2004. The next Commission shall be constituted in January 2007 and the Commission shall be reconstituted every four (4) years thereafter.

11102. Administration.

For administrative purposes, clerical support and necessary funding, the quadrennial Commission shall be housed at I Liheslaturan Guahan [The Legislature] with the Committee that has oversight over tax policy in Guam. The quadrennial Commission shall select a chairperson from among

I

2 GCA LEGISLATIVE BRANCH Cu. II LEGISLATIVE TAx REVIEWCo~nussiON

its members. Quadrennial Commission members shall receive no stipends but shall be reimbursed for actual expenses incurred in the performance of their duties, subject to submission of documentation and approval by the chairperson of the Committee that houses the quadrennial Commission. The quadrennial Commission shall meet from time to time, as determined by the chairperson, to execute its duties.

11103. Membership.

The Director of the Department of Revenue and Taxation or its successor agency, the Administrator of the Guam Economic Development and Commerce Authority or its successor agency, the Senator who chairs the Legislative Committee with oversight over Guam tas policy, the Senator who chairs the Legislative Committee with oversight over budgetary matters, and the Minority Leader, or designee, shall be standing members of the quadrennial Commission. Should oversight over Guam tax policy and budgetary matters fall under the same Legislative Committee, the Speaker shall serve as a standing member of the quadrennial Commission. The five (5) members appointed by the Speaker shall meet the following criteria:

(a) One (I) shall be a Certified Public Accountant, selected from among three (3) names submitted by the Guam Society of Certified Public Accountants;

(b) One (I) shall be an attorney specializing in tax laws, selected from among three (3) names submitted by the Guam Bar Association;


(d) One (I) shall be a representative of the business community who is a business owner, selected from among three (3) names submitted by the Guam Chamber of Commerce; and


11104. Vacancy.

If any vacancy occurs in the appointed membership of the quadrennial Commission prior to the completion of its duties or dissolution, the Speaker shall appoint a replacement member in accordance with Ill 03 of this Chapter.

2

COl 1201 6

2 GCA LEGISLATIVE BRANCH Cu. II LEGISLATIVE TAx REVIEWCO~IMISSION


Government of Guam agencies and departments, including autonomous entities, shall make available to the quadrennial Commission on a timely basis such data and technical support as is necessary for it to perform its duties as provided in this Chapter.


Should data and technical support necessary to accomplish its duties as provided in this Chapter be unavailable from government of Guam entities and/or personnel,/ Liheslatura [the Legislature) may enter into contractual agreements with private consultants as it deems necessary to perform those duties, giving preference to those currently licensed to do business in Guam. I Liheslatura shall approve the funding of the quadrennial Commission.

11107. Duties.

The quadrennial Commission shall conduct a systematic review and evaluation of Guam's tax structure and tax policies, using such standards as set forth in Ill 00 above. The quadrennial Commission shall compare Guam's tax code, rates and fees to other similar jurisdictions within the United States. No later than one (1) year after its initial meeting, the quadrennial Commission shall submit to I Maga 'lahen Guahan [the Governor] and I Liheslaturan Guahan [the Legislature] its evaluation of the island's tax structure, and its revenue and tax policy recommendations, including recommendations for adjustment of tax rates and fees, removal of existing taxes and fees, and draft legislation relative to such recommendations.

11108. Dissolution.


3

CCL120106

2 GCA LEGISlATIVE BRA:-ICH Cu. II LEGISLATIVE TAx REvu:w Co,tMISSION

CHAPTER 11 LEGISLATIVE TAX REVIEW COMMISSION

SOURCE: This Chapter was enacted in its entirety by P.L. 27-56:2.

Ill 00. Legislative Intent. 11101. Establishment of Legislative Tax Review Commission. Ill 02. Administration. 11103. Membership. II 1 04. Vacancy. Ill 05. Government Cooperation. Ill 06. Contractual Services and Funding for Commission. 11107. Duties. 11108. Dissolution.

11100. Legislative Intent.

I Liheslaturan Guahan [The Legislature] intends that the Legislative Tax Review Commission, after appointment and confirmation, shall conduct a systematic review of Guam's tax policies and statutes each quadrennium, using the principles of economic efTtciency, equity, simplicity, administrative feasibility, accountability and for the purpose of promoting economic growth and shall submit to I Maga '/ahen Guahan [the Governor] and to I Lihes/aturan Guahan [the Legislature] an evaluation of Guam's tax structure with recommendations for any changes in revenue and tax policy deemed necessary.

11101. Establishment of Legislative Tax Review Commission.

There is hereby established a Legislative Tax Review Commission, hereinafter 'the Commission.' The quadrennial Commission shall consist of ten (I 0) members as provided by this Chapter, five (5) of whom shall be appointed by the Speaker. The appointments to the first quadrennial Commission shall be made and submitted to I Liheslaturan Guahan [The Legislature] no later than the last day of January, 2004. The next Commission shall be constituted in January 2007 and the Commission shall be reconstituted every four ( 4) years thereafter.

Ill 02. Administration.

For administrative purposes, clerical support and necessary funding, the quadrennial Commission shall be housed at I Liheslaturan Guahan [The Legislature] with the Committee that has oversight over tax policy in Guam. The quadrennial Commission shall select a chairperson from among

I

2 GCA LEGISLATIVE BRA'iCll

CH. II LEGISLATIVE TAX REVIEW C0\1\tiSSIO!\

its members. Quadrennial Commission members shall receive no stipends but shall be reimbursed for actual expenses incurred in the performance of their duties. subject to submission of documentation and approval by the chairperson of the Committee that houses the quadrennial Commission. The quadrennial Commission shall meet from time to time, as determined by the chairperson, to execute its duties.

11103. Membership.

The Director of the Department of Revenue and Taxation or its successor agency, the Administrator of the Guam Economic Development and Commerce Authority or its successor agency, the Senator who chairs the Legislative Committee with oversight over Guam tax policy, the Senator who chairs the Legislative Committee with oversight over budgetary matters, and the Minority Leader, or designee, shall be standing members of the quadrennial Commission. Should oversight over Guam tax policy and budgetary matters fall under the same Legislative Committee, the Speaker shall serve as a standing member of the quadrennial Commission. The five (5) members appointed by the Speaker shall meet the following criteria:

(a) One (I) shall be a Certified Public Accountant, selected from among three (3) names submitted by the Guam Society of Certified Public Accountants:

(b) One (I) shall be an attorney specializing in tax laws, selected from among three (3) nan1es submitted by the Guam Bar Association;


(d) One (I) shall be a representative of the business community who is a business owner, selected from among three (3) names submitted by the Guam Chamber of Commerce; and


11104. Vacancy.

/{any vacancy occurs in the appointed membership of the quadrennial Commission prior to the completion of its duties or dissolution, the Speaker shall appoint a replacement member in accordance with Ill 03 of this Chapter.

2

2 GCA LEGISLATIVE: BRA'\CII Cll. II LEGISLATIVE TAX REVIEWCO~I\IISSIO'\


Government of Guam agencies and departments, including autonomous entities, shall make available to the quadrennial Commission on a timely basis such data and technical support as is necessary for it to perform its duties as provided in this Chapter.


Should data and technical support necessary to accomplish its duties as provided in this Chapter be unavailable from government of Guam entities and/or personnel, I Liheslatura [the Legislature] may enter into contractual agreements with private consultants as it deems necessary to perform those duties, giving preference to those currently licensed to do business in Guam. I Liheslatura shall approve the funding of the quadrennial Commission.

11107. Duties.

The quadrennial Commission shall conduct a systematic review and evaluation of Guam's tax structure and tax policies, using such standards as set forth in Ill 00 above. The quadrennial Commission shall compare Guam's tax code, rates and fees to other similar jurisdictions within the United States. No later than one (I) year after its initial meeting, the quadrennial Commission shall submit to I Maga 'lahen Guahan [the Governor] and I Liheslaturan Guahan [the Legislature] its evaluation of the island's tax structure, and its revenue and tax policy recommendations, including recommendations for adjustment of tax rates and fees, removal of existing taxes and fees. and draft legislation relative to such recommendations.

11108. Dissolution.


3

The Honorable Joe T. San Agustin Speaker, Twenty-Second Guam Legislature 155 Hessler Street Agana, Guam 96910

RE'CD

Dear Mr. Speaker: \..~ ... -- . ~~ '-Transmitted herewith is Bill No. 582, which has been designated as Public Law

No. 22-74.

Attachment

Sincerely yours,

~~.OR OSEPH F. ADA

Governor

~~u542

1'~~:,; ..,..:p., Commonwealth l"ow!

TWENTY-SECOND GUAM LEGISLATURE

1994 (SECOND) Regular Session

CERTIFlCATION OF PAS$AGE OF AN ACT TO TiiE GOVERNOR

This is to certify that Substitute Bill No. 582 (LS), "AN ACT TO CREATE 1HE GUAM FINANCE COMMISSION IN ORDER TO COORDINATE THE FUNCTIONS OF ECONOMIC AND FINANCIAL DATA COLLECTION, ECONOMIC FORECASTING, FINANCIAL MANAGEMENT, AND TAX POUCY FOR THE TERRITORY OF GUAM; TO AMEND SECTION 47060 OF THE GOVERNMENT CODE RELATIVE TO THE RESPONSIBILITY OF 1HE DEPARTMENT OF COMMERCE TO PREPARE CERTAIN ECONOMIC DATA; AND TO AMEND SECTION 47060.1 OF THE GOVERNMENT CODE, RELATIVE TO 1HE RESPONSIBILITY OF THE DEP ARIMENI OF COMMERCE TO PUBLISH CERTAIN ECONOMIC DATA," returned to the Legislature without the approval of the Governor, was reconsidered by the Legislature and after such reconsideration, the Legislature did, on the 16th day of February, 1994, agree to pass said bill notwithstanding the objection of the Governor by a vote of two-thirds or more of all the members thereof, to wit: by a vote of fifteen (15) members.

-'"""

(

Attested:

. /1 ~r ..~ /

JOE T. SAN AGUS Speaker

---------------------------------------------------------------------------------This Act was received by the Governor this 9l3 rcl day of -P.tbruAry . 1994, at

3 :So o'clock -f!--M

Public Law No. --:2::..2-_,_7-"-4 _____ _

\.Jh_..ugGovernor's Office

TWENTY-SECOND GUAM LEGISLATURE

1993 (FIRST) Regular Session

Bill No. 582 (LS) Substitute Bill by Committee on Ways and Means and further substituted by Committee on Rules

Introduced by: C. T. C. Gutierrez T. S. Nelson M. D. A. Manibusan A. C. Blaz P. C. Lujan D. Parkinson T. C. Ada J.P.Aguon E. P. Arriola J. G. Bamba M. Z. Bordallo D. F. Brooks F. P. Camacho H. D. Dierking V. C. Pangelinan E. D. Reyes J. T. San Agustin F. E. Santos D. L. G. Shimizu T.V. C. Tanaka A. R. Unpingco

AN ACT TO CREATE THE GUAM FINANCE COMMISSION IN ORDER TO COORDINATE THE FUNCTIONS OF ECONOMIC AND FINANCIAL DATA COLLECTION, ECONOMIC FORECASTING, FINANCIAL MANAGEMENT, AND TAX POLICY FOR THE TERRITORY OF GUAM; TO AMEND SECTION 47060 OF THE GOVERNMENT CODE RELATIVE TO THE RESPONSffiiLITY OF THE DEPARTMENT OF COMMERCE TO PREP ARE CERTAIN ECONOMIC DATA; AND TO AMEND SECTION 47060.1 OF THE GOVERNMENT

I

CODE, RELATIVE TO THE RESPONSIBILITY OF THE DEPARTMENT OF COMMERCE TO PUBLISH CERTAIN ECONOMIC DATA.

1 BE IT ENACTED BY THE PEOPLE OF THE TERRITORY OF GUAM:

2 Section 1. Chapter :xn of Title XX of the Government Code is repealed 3 and reenacted to read:

4 "Chapter xn 5 GUAM FINANCE COMMISSION

6 19950. Legislative findings. (a) Background. The government of

7 Guam was given the authority under federal law in the Tax Reform Act of

8 1986 to develop its own tax code to replace the enforcement of the Internal

9 Revenue Code as a local tax. Executive Orders 86-09 and 87-06 created tax

1 0 commissions, and Public Law 2~-181, as amended, created a Guam Tax \....uut= 1 1 Commission to incorporate the work of the previous tax commissions and to

12 draft a Guam Tax Code. The Guam Tax Code Commission has engaged in

1 3 intense work since 1990 on the revenue levels of the government, as well as

1 4 negotiating with the federal government on various aspects of a de-linking

1 5 arrangement, particularly the issue of retaining the ability of the Guam

1 6 resident to file a single tax return on Guam and avoid filing a second tax

1 7 return in the United States.

1 8 In progressing on these tasks, it has become evident that the

1 9 government of Guam will need more coordination and development of a

2 0 unified system of information gathering regarding economic factors and

2 1 revenue forecasting, as well as integrated financial management. This is

2 2 necessary as Guam embarks on more sophisticated financial arrangements

2 3 made possible by a more prosperous economy, and enters the Twenty-First.

2 4 Century as a participatory partner in the world economy.

2

I (b) Intent. It is the intent of the Legislature to continue the work of the

2 Guam Tax Code Commission and to give this commission additional

3 authority to act as a permanent commission on government finance. There is

4 a vital need for consolidation of the government's financial and economic

5 information, improvement of the forecasting of revenues, expenditures, and

6 surplus or deficit, and to determine the impact of federal expenditures on the

7 territory. The enlarged commission would serve as the government's

8 umbrella fiscal policy organization, would commence fiscal policy work, and

9 provide proposed legislation for major improvement in the government's

1 0 basic data systems and increasing Guam's fiscal forecasting capability.

I I 19951. Establishment of Guam Finance Commission. The Guam

l 2 Finance Commission is established, consisting of the following members:

I 3 (a) Three (3) voting members appointed by the Governor, including

1 4 One (1) Guam Certified Public Accountant, to serve at the

l 5 pleasure of the Governor;

I 6 (b) Four (4) voting members appointed by the Speaker of the

l 7

l 8

Legislature or his designee, to serve at the pleasure of the

Speaker;

I 9 (c) Two (2) voting members consisting of the Legislature's

2 0 Chairperson of the Committee on Federal and Foreign Affairs

2I and the Chairperson of the Committee on Ways and Means;

2 2 {d) Five (5) ex-officio non-voting members consisting of:

2 3 the Directors of the Departments of Revenue and Taxation,

24

25

26

27

Administration, Commerce, Bureau of Budget and Management

Research, and the Administrator of the Guam Economic

Development Authority (GEDA). The Directors of the above-

named departments and the Administrator of GEDA shall serve in 3

1 their own capacity as members of the Guam Finance Commission

2 or shall appoint instead a designee from their respective

3 departments or agency to serve. These ex-officio non-voting

4 members of the Commission are to serve on the Commission only

5 as consultants, and are not entitled to vote on any matter

6 whatsoever.

7 Any member of the Commission may also be dismissed for cause, approved by

8 a majority vote of the members. Any vacancy shall be filled by the same

9 authority who originally appointed the member to such position, or, in the

1 0 case of a former member of the Guam Tax Code Commission who became a

1 1 member of the Guam Finance Commission pursuant to Section 19954 of this

1 2 Code, by the same authority who appointed such member to the Guam Tax

1 3 Code Commission. The Commission shall elect a chairman from among

1 4 members, who shall designate such other officers as are necessary to conduct

1 5 the Commission's business. The Commission shall draft and implement

1 6 operating procedures for the conduct of its business, which procedures are

1 7 exempt from the provisions of the Administrative Adjudication Law.

1 8 19952. Powers of the Commission. In carrying out its duties and

1 9 responsibilities, the Commission shall have the following powers:

2 0 (a) except as provided by United States and Guam law regarding the

2 1 confidentiality of tax return information, to examine any document, report,

2 2 or data, including programs and data files, held by any territorial agency,

2 3 which agencies are required to cooperate with the Commission and its

2 4 employees in any such examination;

2 5 (b) to meet at such times and places as it may deem proper;

2 6 (c) to hold hearings at times and places as it may deem proper;

4

I (d) upon a vote of the Commission, to issue subpoenas, to compel the

2 attendance of witnesses and the production of books, records, papers,

3 accounts, reports, and documents;

4 (e) to administer oaths;

5 (f) to employ an executive assistant and staff as may be necessary,

6 however, before additional staff is employed from outside the government,

7 individuals already in the employment of the government and possessing

8 needed knowledge and skills shall be transferred to the Commission upon the

9 request of the Director of the respective Department where the individual is

I 0 employed, or in the case of GEDA, upon the request of the Administrator;

I1 (g) to contract with agencies or individuals, public or private, as it

1 2 deems necessary, to provide or prepare services, facilities, studies, and

1 3 reports to the Commission as will assist it in carrying out its duties and

1 4 responsibilities;

I 5 (h) to do any and all other things necessary or convenient to enable it

I6 fully and adequately to perform its duties and to exercise the powers

I 7 expressly granted to it.

I 8 19953. Duties and responsibilities of the Commission. The

I 9 Commission shall:

2 0 (a) if they are not completed, continue the functions of the Guam Tax

2 I Code Commission, as follows:

22 (i) study the effect of the present tax system as it has affected

2 3 Guam during varying economic situations in the past and present, with

2 4 a view towards probable future situations;

2 5 (ii) develop or adapt an econometric model of Guam's existing

2 6 and projected economy, which model shall be used to simulate the effect

2 7 of revenue raising, the effect of any proposed benefits and the optional 5

1 revenue generation and utility thereof. The Commission shall utilize

2 existing and otherwise available resources, such as the econometric

3 model now used by the United States Treasury, in its development of

4 such model for its work. In developing or updating its model, the

5 Commission shall take into account the Comprehensive Economic

6 Development Plan to be drafted pursuant to Public Law 20-147;

7 (iii) solicit information and advice from various sources on the

8 present tax structure and desired changes, through contact with

9 community sources such as the Guam Chamber of Commerce, the

10 Guam Employers' Council, the Guam Association of Social Workers,

1 1 the Guam Federation of Teachers, the Guam Visitors Bureau, the

1 2 Guam Association of Public Accountants, the Guam Society of Certified

1 3 Public Accountants, and others, and from public sector sources such as

1 4 the Department of Commerce, the Department of Public health and

1 5 Social Services, the Bureau of Planning, and others;

1 6 (iv) determine the effect of varying tax approaches tried in other

1 7 jurisdictions, such as Puerto Rico, the Virgin Islands, Hawaii, the

1 8 Commonwealth of the Northern Mariana Islands, and others,

1 9 including foreign jurisdictions, to the extent that they are useful for the

2 0 Commission's purposes;

21 (v) draft proposed tax legislation, incorporating

2 2 recommendations deemed desirable for Guam after undertaking the

2 3 study required in paragraphs (i), (ii), (iii), and (iv) of this Subsection (a),

2 4 and transmit such legislation to the Legislature. Until December 31,

2 5 1994, a favorable vote of six (6) or more voting members of the

2 6 Commission on the proposed legislation shall be necessary before its

6

' I transmittal to the Legislature. After December 31, 1994, a favorable vote

2 of a majority of the voting members shall be necessary.

3 (vi) take any and all steps necessary to communicate with the

4 Federal government regarding Guam's tax system; study existing

5 applicable domestic and international tax laws, tax treaties, and

6 agreements which may have a bearing on the present and future

7 relationship between the United States and Guam; and propose draft

8 modifications of such tax laws, tax treaties, and agreements which

9 might adversely impact upon Guam's development, such drafts and

1 0 proposals resulting from communications between the Commission and

l 1 representatives of the Federal government regarding such legislation.

I 2 (b) Undertake additional duties and responsibilities as follows:

I 3 (i) develop a specific blueprint for consolidation of government

I 4 Policy Financial Information System to be administered by a Special

I 5 Accounting Service, directed by the Controller of the Department of

I 6 Administration and composed of the Chief of the Taxpayer Services

I 7 Administration of the Department of Revenue and Taxation, the

I 8 Budget Analyst Supervisor of the Bureau of Budget and Management

1 9 Research, a designee of the Chairperson of the Legislature's Committee

2 0 on Ways and Means, and consulting accountants as required for system

2 I development, administration, and automation;

2 2 (ii) develop a specific blueprint for the consolidation of

2 3 government economic information as a basis for management of a

2 4 central Fiscal Policy Economic Information System, including

2 5 administration of the Guam Econometric Model as provided in item (ii)

2 6 of Subsection (a) of this Section, to be administered by a Special

2 7 Economic Service, directed by the Senior Economist of the Department 7

1 1 of Revenue and Taxation and composed of the Chief Planner of the

2 Bureau of Planning, the Chief Economist of the Department of

3 Commerce, the Research Manager of the Guam Visitors Bureau, the

4 Senior Economist of the Department of Labor, the Chief Economist of

5 the Bank of Guam, and such consulting economists and statisticians

6 recruited for the purpose of macroeconomic model design,

7 management, and automation;

8 (iii) compile and make available to the Legislature, the Governor,

9 and the public, forecasts of revenues, current and prior year

1 0 expenditures, and surplus or deficit;

1 1 (iv) determine the impact of federal expenditures in Guam;

1 2 (v) make reports to the Legislature and to the Governor as

13 follows:

1 4 (1) on July 1, 1995, and on a semiannual basis thereafter, the

1 5 impact of federal expenditures on Guam's economy and

1 6 employment, including projections of federal expenditures coming

1 7 into Guam and changes in these expenditures; the impact of these

1 8 expenditures on Guam's economic growth, employment, tax

I 9 revenues, and other variables determined to be significant by the

2 0 Commission, for the next year compared with the previous three

2 1 (3) years; identify significant federal expenditures or potential

2 2 expenditures coming into Guam affecting military bases,

2 3 installations, active duty and retired military personnel within

2 4 Guam, as well as the impact of the changes in these expenditures.

2 5 (2) Prepare long-range forecasts of revenues and

2 6 expenditures for each of the four ( 4) years immediately beyond the

2 7 budget year and for the ninth year beyond the budget year. 8

'

' I 19954. Carryover from the Guam Tax Code Commission. (a)

2 Appropriations, funds, and authority. The Guam Tax Code Commission is

3 terminated, and all appropriations of funds to the Guam Tax Code

4 Commission shall be transferred to the Guam Finance Commission within

5 Thirty (30) days of the effective date of this Section.

6 (b) Membership, vacancies, chairman, and operating procedures. All

7 current individual members of the Guam Tax Code Commission on the

8 effective date of this Section shall be the voting members of the Guam

9 Finance Commission, occupying their respective positions as set out in the

I 0 provisions of 19951 of this Chapter. Those who were appointed continue to

I 1 occupy their positions without the necessity for reappointment. Any vacancy

I 2 occurring among the current individual members shall be filled in the manner

I 3 set forth in Section 19951 of this Chapter. The former Chairman of the Guam

I 4 Tax Code Commission is the Chairman of the Guam Finance Commission,

I 5 and the operating rules and procedures of the Guam Tax Code Commission

I 6 shall be utilized by the Guam Finance Commission until repealed, modified,

I 7 or otherwise changed by the Guam Finance Commission.

I 8 (c) All rights and duties formerly vested in the Guam Tax Code

I 9 Commission, or any official thereof, shall become vested in the Guam

2 0 Finance Commission, or any equivalent official thereof, whichever is

2 1 applicable."

2 2 Section 2. Repeal of obligation of Department of Commerce to prepare

2 3 certain economic data and Repeal of obligation of Department of Commerce

2 4 to publish certain economic data. (a) Legislative Findings. The Legislature

2 5 finds that the Department of Commerce has never devised and prepared, or

2 6 published economic data known as Gross Island Product, Gross Island Debt,

2 7 or Income and Product Accounts. 9

. 1

1 (b) Amendment of Subsection (a) of Section 47060 of the Government

2 Code. Subsection (a) of Section 47060 of the Government Code, amended in

3 Section 15 of Chapter n of Public Law 16-111, is further amended to read: 4 "(a) To investigate, study and undertake ways and means of

5 promoting and encouraging the prosperous development and

6 protection of the interest and welfare of Guam's legitimate business,

7 industry, and commerce, and in connection therewith to investigate

8 and study governmental and other external conditions affecting

9 Guam business, industry and commerce and on the basis thereof to

1 0 compile, collect, develop and publish quarterly scientific indices and

l 1 economic indicators including but not limited to economic growth,

1 2 trade balances, exports and imports, consumer prices and other

1 3 information relating to economic conditions. n

1 4 (c) Amendment of Section 47060.1 of the Government Code. Section

15 47060.1 of the Government Code, added in Section 16 of Chapter n of Public 16 Law 16111, is further amended to read:

1 7 "47060.1. Priority of Publication. In the even sufficient funds

1 8 are not available to the Department to publish all of the material

19 required by 47060.1 (a) of the Government Code, the information

2 0 gathered shall be published according to the following priorities:

21 (a) consumer prices;

2 2 (b) exports and imports;

2 3 (c) trade balances; and

2 4 (d) all other information designated for publication."

10

1WENTY-SECOND GUAM LEGISLATURE 1994 (SECOND) Regular Session

Bill No. V/irfd Resolution No. ----

VOTING SHEET (AS REVISED)

Date: ---,.;}~" /_,_I (o-+/ ...:....!.14_

Questioru ____________________________________________ ___

N'

'{{- J~ -7L} .1ru.-1t"'ll ,/''.r;,,,ll

RECEIVED OFFICE OF THE SPEAKER DATt: DEC 0 6 1993 TIME: \b.'8Pfr RECD '""

J;,ilt'iHI-Jn 'l;u~"ou

, 1n-11 1-\ \f 1111-,,\ ~- 1 t:_~, tR I H:.t~AN I ~1-\< :yt_ \Ill l't.,;ANA_ (;\ 'A\..l '.it>'lJ,) I' ;;.,o. fLeotsL~,.-- .. , ~

OEC 0 6 1993 . _

The Honorable Joe T. San Agustin Page Two

No more commissions with extra staff.

If the goals of this Commission must be implemented, it can be done by simply creating a legislative Committee, on an ad hoc basis, and using existing personnel to staff it. To permanently enshrine this as a full-time Commission is only intended to justify the appropriations and hiring measure that will soon be winging its way towards Adelup, despite the inevitable protestations of the main author to the contrary.

Sincerely,

Governor

TWENTY-SECOND GUAM LEGISLATURE 1993 (FIRST) Regular Session

CERTIFICATION OF PASSAGE OF AN ACT TO THE GOVERNOR

This is to certify that Substitute Bill No. 582 (LS), "AN ACT TO CREATE THE GUAM FINANCE COMMISSION IN ORDER TO COORDJNATE THE FUNCTIONS OF ECONOMIC AND FINANCIAL DATA COLLECTION, ECONOMIC FORECASTING, FINANCIAL MANAGEMENT, AND TAX POUCY FOR THE TERRITORY OF GUAM; TO AMEND SECTION 47060 OF THE GOVERNMENT CODE RELATIVE TO THE RESPONSIBILITY OF THE DEPARTMENT OF COMMEI}CE TO PREPARE CERTAIN ECONOMIC DATA; AND TO AMEND SECTION 47060.1 OF THE GOVERNMENT CODE, RELATIVE TO THE RESPONSIBILITY OF THE DEPARTMENT OF COMMERCE TO PUBLISH CERTAIN ECONOMIC DATA," was on the 19th day of November, 1993, duiy and regularly passed.

Attested:

~d~/ JOE T. SAN AGUSTIN

Speaker

This Act was received by the Governor this ~:.\ 1- day of f..Jo\Jt..mb-Lf \ o . \ s-- o'clock A_.M.

APPROVED:

Date:_++--+-"7""'-------

~ !}. )j~.;q= Assistant Staff Officer

Governor's Office

1993, at

TWENTY -SECOND GUAM LEGISLATURE 1993 (FIRST) Regular Session

Bill No. 582 (LS) Substitute Bill by Committee on Ways and Means and further substituted by Committee on Rules

Introduced by: C. T. C. Gutierrez T. S. Nelson M.D. A. Manibusan A. C. Blaz P. C. Lujan D. Parkinson T.C. Ada J.P. Aguon E. P. Arriola J. G. Bamba M. Z. Bordallo D. F. Brooks F. P. Camacho H. D. Dierking V. C. Pangelinan E. D. Reyes J. T. San Agustin F. E. Santos D. L. G. Shimizu T.V. C. Tanaka A. R. Unpingco

AN ACT TO CREATE THE GUAM FINANCE COMMISSION IN ORDER TO COORDINATE THE FUNCTIONS OF ECONOMIC AND FINANCIAL DATA COLLECTION, ECONOMIC FORECASTING, FINANCIAL MANAGEMENT, AND TAX POLICY FOR THE TERRITORY OF. GUAM; TO AMEND SECTION 47060 OF THE GOVERNMENT CODE RELATIVE TO THE RESPONSIBILITY OF THE DEPARTMENT OF COMMERCE TO PREPARE CERTAIN ECONOMIC OAT A; AND TO AMEND SECTION 47060.1 OF THE GOVERNMENT

I

CODE, RELATIVE TO THE RESPONSIBILITY OF THE DEPARTMENT OF COMMERCE TO PUBLISH CERTAIN ECONOMIC DATA.

1 BE IT ENACTED BY THE PEOPLE OF THE TERRITORY OF GUAM:

2 Section 1. Chapter XII of Title XX of the Government Code is repealed

3 and reenacted to read:

4 "Chapter XII

5 GUAM FINANCE COMMISSION

6 19950. Legislative findings. (a) Background. The government of

7 Guam was given the authority under federal law in the Tax Reform Act of

8 1986 to develop its own tax code to replace the enforcement of the Internal

9 Revenue Code as a local tax. Executive Orders 86-09 and 87-06 created tax

10 commissions, and Public Law 21-181, as amended, created a Guam Tax Code

1 1 Commission to incorporate the work of the previous tax commissions and to

1 2 draft a Guam Tax Code. The Guam Tax Code Commission has engaged in

1 3 intense work since 1990 on the revenue levels of the government, as well as

1 4 negotiating with the federal government on various aspects of a de-linking

1 5 arrangement, particularly the issue of retaining the ability of the Guam

1 6 resident to file a single tax return on Guam and avoid filing a second tax

1 7 return in the United States.

1 8 In progressing on these tasks, it has become evident that the

l 9 government of Guam will need more coordination and development of a

2 0 unified system of information gathering regarding economic factors and

2 1 revenue forecasting, as well as integrated financial management. This is

2 2 necessary as Guam embarks on more sophisticated financial arrangements

2 3 made possible by a more prosperous economy, and enters the Twenty-First

2 4 Century as a participatory partner in the world economy.

2

(b) Intent. It is the intent of the Legislature to continue the work of the

2 . Guam Tax Code Commission and to give this commission additional

3 authority to act as a permanent commission on government finance. There is

4 a vital need for consolidation of the government's financial and economic

5 information, improvement of the forecasting of revenues, expenditures, and

6 surplus or deficit, and to determine the impact of f~deral expenditures on the

7 territory. The enlarged commission would serve as the government's

8 umbrella fiscal policy organization, would commence fiscal policy work, and

9 provide proposed legislation for major improvement in the government's

1 0 basic data systems and increasing Guam's fiscal forecasting capability.

I 1 19951. Establishment of Guam Finance Commission. The Guam

I 2 Finance Commission is established, consisting of the following members:

(a) Three (3) voting members appointed by the Governor, including

l 4 One (1) Guam Certified Public Accountant, to serve at the

l 5 pleasure of the Governor;

I 6 (b) Four (4) voting members appointed by the Speaker of the

l 7 Legislature or his designee, to serve at the pleasure of the

18 Speaker;

1 9 (c) Two (2) voting members consisting of the Legislature's

20 Chairperson of the Committee on Federal and Foreign Affairs

21 and the Chairperson of the Committee on Ways and Means;

2 2 (d) Five (5) ex-officio non-voting members consisting of:

23

24

27

the Directors of the Departments of Revenue and Taxation,

Administration, Commerce, Bureau of Budget and Management

Research, and the Administrator of the Guam Economic

Development Authority (GEDA). The Directors of the above-

named departments and the Administrator of GEDA shall serve in 3

1

2

3

4

5

6

7

8

9

10

1 1

12

1 3

14

15

1 6

17

1 8

19

20

21

22

23

24

25

26

their own capacity as members of the Guam Finance Commission ' or shall appoint instead a designee from their respective

departments or agency to serve. These ex-officio non-voting

members of the Commission are to serve on the Commission only -as consultants, and are not entitled to vote on any matter

whatsoever.

Any member of the Commission may also be dismissed for cause, approved by

a majority vote of the members. Any vacancy shall be filled by the same

authority who originally appointed the member to such position, or, in the

case of a former member of the Guam Tax Code Commission

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