March 6, 2002 FOR IMMEDIATE RELEASE
WASHINGTON, D.C.—FALEOMAVAEGA BILL TO EXEMPT ASG BOND INTEREST FROM TAXATION PASSES SUBCOMMITTEE
Congressman Faleomavaega announced today that a bill he introduced to prohibit states, municipalities and other territories from taxing the interest on bonds issued by the American Samoa Government, passed the House Subcommittee on Commercial and Administrative Law.       “This legislation will have a direct and positive impact on the residents of American Samoa and today’s approval of this bill is an early step toward providing ASG with additional assistance in improving the government’s financial condition,” Congressman Faleomavaega said.  “Under current federal law, the territories of the Commonwealth of the Northern Mariana Islands, Guam, the Commonwealth of Puerto Rico, and the U.S. Virgin Islands have the authority to issue municipal bonds to foster a broad range of economic activity.  These bonds are exempt from income taxation by the federal government, state governments, territorial governments, municipal governments, and the government of the District of Columbia.  American Samoa also has the authority to incur debt and issue bonds, but the income from most bonds is subject to taxation by state and municipal governments.”      “The amendment in the nature of a substitute passed today by the House Subcommittee gives the Government of American Samoa the authority to issue a full range of bonds, the interest on which will be exempt from taxation by other governments,” Congressman Faleomavaega said.  “To affirm the legality of bonds issued before enactment of this legislation, the bill includes a provision which would apply current law to bonds issued before enactment and applies new law to bonds issued after enactment.”      As I noted in my prepared statement, “there is strong support in American Samoa for this legislation.  The Governor has indicated that the local government could have saved $100,000 in interest costs if the interest on the bonds the government issued in FY2000 would have been tax exempt,” the Congressman said.  “The local power authority, a semi-autonomous government agency, has also said that it would like to sell bonds to purchase new diesel generator sets to accommodate the territory’s growing population.  This legislation will lower the interest costs of these prospective sales and will also enable the local government to address deficiencies in its current infrastructure.”      “I am pleased that Chairman Bob Barr (R-GA) is supportive of this legislation and I thank him for his support,” Congressman Faleomavaega said.  “Although the bill still needs to be considered by the House Committee on the Judiciary and the House Committee on Resources before it is referred to the U.S. Senate, I am optimistic that we have the support necessary to get this bill through both houses of Congress this year.”
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