BILL WOULD EXEMPT AM. SAMOA BONDS FROM TAXES

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PAGO PAGO, American Samoa, (Samoa News, May 15) - Federal
legislation that would amend U.S. laws to permit the American Samoa government
to issue bonds and be exempt from taxes on interest earned from bonds
unanimously passed the U.S. House Judiciary Committee last week.

The measure was introduced by Congressman Eni Faleomavaega

An identical measure was introduced last year by the Congressman
and passed by voice vote on the full U.S. House on Sept. 24.

Although the Senate was prepared to support and pass last year's
bill, the 107th Congress adjourned before the matter could be resolved, said
Faleomavaega.

If enacted into law, the proposed amendments said, that the
"interest on any bond or other obligation issued by or on behalf of the
Government of American Samoa shall be exempt from taxation by the government of
American Samoa and the governments of any of the several States, District of
Columbia, any territory or possession of the United States and any subdivision
thereof," according to a copy of the measure obtained by the Samoa News.

Faleomavaega told the committee that Congress has expressly
provided for the exemption of state and local taxes for bonds issued by Guam,
the Virgin Islands, Puerto Rico and the Commonwealth of the Northern Mariana
Islands.

"While American Samoa can issue bonds similar to the other
territories, the interest earned from American Samoa bonds is subject to
taxation by several States, Washington D.C. and the other territories," he
said.

He said the proposal "would provide parity to American
Samoa."

Faleomavaega said the measure will also make American Samoa
bonds more attractive to investors and could provide additional sources of funds
for the Government of American Samoa.

According to the Congressman there is strong support in American
Samoa for this legislation.

He further states that the American Samoa Power Authority has
indicated that it would like to sell bonds to purchase new diesel generator sets
to accommodate the territory's growing population.

"This legislation would lower the interest costs of the
prospective sales and will also enable the government to address deficiencies in
its current infrastructure," said the congressman.

"I urged my colleagues to support this legislation which is
beneficial and critical to the needs of American Samoa," he added.

May 16, 2003

Samoa News: www.samoanews.com 

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