Changes In Territorial Cabotage Law Gets U.S. Support

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Pacific Islands Development Program, East-West Center With Support From Center for Pacific Islands Studies, University of Hawai‘i

Kiaaina lends weight to bill to improve air services to Am. Samoa

By Fili Sagapolutele

PAGO PAGO, American Samoa (The Samoa News, April 7, 2016) – The Obama Administration has voiced support of a US Senate bill, which includes a provision that addresses the current requirement of obtaining a federal cabotage exemption every 30 days for foreign airlines opening on domestic routes. The Samoa government owned Polynesian Airlines, under 30-day cabotage waivers, currently serves the route between the Manu’a islands and Tutuila.

Support for the Omnibus Territories Act of 2015 was voiced by US Interior Assistant Secretary for Insular Areas, Esther Kia’aina during her testimony Tuesday before the US Senate Committee on Energy and Natural Resources, where she also called on Congress to include the other four US territories in the health and tax provisions of the Puerto Rico financial crisis legislation.

MANU’A SERVICE

Kia’aina testified on two measures before the Senate committee, which has oversight jurisdiction on the US territories. One of the measures is the Omnibus Territories Act — introduced last December by US Sen. Lisa Murkowski of Alaska — that would facilitate reliable air service between the Tutuila and the Manu’a island group.

In her written testimony, Kia’aina explains that no U.S. airline provides service within American Samoa and Polynesian currently provides the service. While permitting this service on a temporary basis, U.S. law requires the renewal of the permit every 30 days, she says.

"The lack of reliable air service within American Samoa impedes the development of its full economic potential," she said. "Tourism, an essential economic driver for island communities, cannot thrive without frequent and regular air service. Social development and quality of life are negatively affected, especially essential educational and health care services for the residents of Manu’a."

She says this provision in the bill would allow a foreign carrier to sustain service between Tutuila and Manu’a. "The removal of the requirement for a new application every 30 days will bring certainty to the route and allow reservations to be made far in advance of expected travel, aiding tourism and economic development in American Samoa, especially Manu’a," she said, adding that the Obama Administration supports this provision.

There were no questions from the committee on this provision of the bill, although questions were asked about the US and Palau agreement as well as other provisions of the Omnibus Territories Act.

[PIR editor’s note: On April 7, 2016 The Samoa News reported that the American Samoa ‘Port Administration as well as Chamber of Commerce have voiced support of the proposed new inter Samoa service by Apia-based Talofa Airways Limited, which also plans to expand service beyond Pago Pago. ... Talofa Airways, a start-up airline, filed an application last month with the US Transportation Department (USDOT) to operate between Apia and Pago Pago and points beyond Pago Pago such as Vavau and Nuku’alofa in Tonga. The airline, using two nine-passenger seat aircraft, is also proposing all-cargo services.’]

TAX & HEALTH

In verbal testimony, Kia’aina says that it was last Fall when the Obama Administration forwarded a roadmap to Congress outlining measures dealing with the economic and fiscal crisis in Puerto Rico.

She says DOI believes the other four territories should be considered for inclusion in the health and tax provisions that may be extended to Puerto Rico.

"Mainly, the Earned Income Tax Credit (EITC) and the Medicaid provisions," she said. "This will would equalize treatment among all of the territories and the states as well as take steps to prevent a crisis in the other smaller territories based on unequal treatment from development in these islands."

In her written testimony, Kia’aina said that similar to Puerto Rico, the other four territories — American Samoa, Guam, Northern Mariana Islands and US Virgin Islands — face capped Medicaid funding from the federal government and a lower per capita contribution than the 50 states and the District of Columbia.

Recognizing the need to elevate healthcare services in the territories, the Obama Administration’s fiscal year 2017 budget proposes a path for the territories to establish Medicaid programs that offer similar benefits and receive Federal funding contributions like the 50 states, she said.

On the EITC, she says extending this tax credit to the other four territories "would promote economic expansion and support workers in the islands who continue to face challenges in growing and diversifying their economies."

As previously reported by Samoa News, Gov. Lolo Matalasi Moliga told Kia’aina during a meeting in Washington D.C. in February that American Samoa is interested in being included in these two provisions of the Puerto Rico legislation, but not the bankruptcy provision.

Samoa News notes that provision of the Omnibus Territories Act of 2015 dealing with Manu’a flights, is similar to a bill introduced in February this year in the US House, by Congresswoman Aumua Amata. Additionally, the US Senate committee hearing was webcast live-online.

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