OFFICE OF THE GOVERNOR
OFFICIAL PRESS RELEASE
(for immediate release, February 27, 2007)

Contact person:  Pati Faiai, Chief of Staff
Contact telephone:  633-4116
In Washington DC:  Vince Iuli, Press Officer, 1-623-466-4145

Governor Togiola appears at
U.S. House Committee on Natural Resources

(WASHINGTON DC) Governor Togiola Tulafono today, February 27, 2007, testified at the oversight hearing on the proposed Fiscal Year 2008 Budget request for the Department of the Interior's Office of Insular Affairs. The Subcommittee on Insular Affairs has jurisdiction over the OIA budget, which includes funding for the territories. Also testifying were Governor Felix P. Camacho of Guam and Deputy Assistant Secretary Papali'itele David Cohen. Presiding over the hearing was Representative Donna Christian Christensen of the US Virgin Islands, Representative Fortuno of Puerto Rico and Representative Madeleine Bordallo of Guam.

In his testimony before the Subcommittee Governor Togiola relayed information related to the challenges faced by the American Samoa economy. Governor Togiola underscored the need for economic development efforts to correlate to long term budget planning, minimum wage structure in the territory and federal tax incentives in order to best plan government operations into the future.

Working on these efforts in piecemeal fashion is not getting the job done. Economic development does not occur in a vacuum. Sufficient infrastructure must be in place to support it; federal tax incentives must be in place to encourage it, and appropriate efforts to keep costs low for investors must be in place in order to make economic development endure.

Governor Togiola fielded questions from Representatives Christensen, Fortuno and Bordallo on issues related to the fiscal health of the territory, as well as his own view on the responsiveness and appropriateness of the OIA levels of funding and initiatives.

Funding mechanisms such as technical assistance grants and operations maintenance and improvement program (OMIP) grants are critical to our fiscal management, economic development and federal funding administration.  Generally supportive of OIA funding and performance, the Governor reminded the Subcommittee that there is always room for improvement. More coordinated funding efforts are needed in order to ensure that American Samoa not only survives, but thrives in the future.

Governor Togiola acknowledged the CIP funding priority for the undersea fiber optic cable, which the administration recognizes as a major economic development initiative, which will lure e-commerce business and technological applications that will diversify the private sector and create jobs and opportunities for American Samoans in the near future. Papali'itele David Cohen echoed the Governor's sentiments regarding the amazing challenges that American Samoa faces in regard to economic development.

Governor Togiola relayed to the Subcommittee his excitement about the reestablishment of the important oversight and policymaking body. "I look forward to the Subcommittee's involvement and collaboration on the OIA budget, and also look forward to keeping them informed of all our efforts involving federal funding through the OIA."

The following is the official written Statement of the Honorable Togiola Tulafono, Governor of American Samoa before the U.S. House Committee on Natural Resources, February 27, 2007:

Talofa. Honorable Chairman and distinguished members of this Committee, it is with great pleasure and honor that I appear here today at your invitation to give testimony on the Fiscal Year 2008 budget of the Office of Insular Affairs. I thank you for this opportunity to convey to you the importance of this funding for the territory of American Samoa, our operations and our economic development.

Introduction

 The islands of Eastern Samoa became part of the US in 1900 and 1904. American Samoa, located in the Central South Pacific is the only United States territory south of the equator. A central premise of ceding eastern Samoa to the US was to preserve the rights and property of the islands' indigenous inhabitants. American Samoa's constitution requires the government to protect persons of Samoan ancestry from the alienation of their lands, protect against the destruction of the Samoan way of life and language, and to encourage business enterprise among persons of Samoan ancestry. American Samoa, in turn, ceded authority over our lands to the US and pledged to it our allegiance. The depth of our commitment is evident today in the high per capita numbers and contributions of our people to the US military and service in current wars.

American Samoa has made extraordinary progress since that time. In a little over a century, we have built modern economic, education, health care and capital infrastructure systems. As such, American Samoa has essentially become self-governing.

Operational grants

ASG receives direct operating grants from DOI, to the tune of fifteen million dollars per year. While some may view ASG's operational grants as an anachronism from a paternalistic era of government, I assure this Committee that the operational grants are absolutely needed by ASG. ASG's only full-scale health care institution, the LBJ Tropical Medical Center, and the Department of Education are the major recipients of these operational grant monies. Even as such, the status of healthcare and education are in great need of additional assistance.

Our operations grants have not seen any significant increase for over 20 years, despite the fact that during this intervening time the population has doubled, and the cost of living has increased approximately sixty percent. American Samoa has struggled to maintain essential government services, but this can hardly be done given the state of the economy in American Samoa, even with the help of our canneries.

Tax Incentives

The precarious situation of our canneries and the tuna canning industry as a whole, underscores the necessity for economic development and diversification of the territory's private sector. The tuna canning industry has survived in the territory due in large part to federal tax incentives and favorable treatment of their goods within the US market. Strengthening these incentives and ensuring advantageous treatment of canned tuna produced in American Samoa will help an already beleaguered industry to continue to stabilize our private sector while we carry on our efforts at diversification. The eventual extension of these same incentives and favorable treatment to other firms and companies who are willing to set up business in the territory will be key to aiding these much needed efforts.

In conjunction with the Office of Insular Affairs, my administration has submitted to our Representative, for his review, consideration and possible adoption, a tax incentive package that we believe focuses on just this priority: promoting business investment within American Samoa. With the honorable Congressman's help and the help of this Committee, we can make a meaningful federal tax incentive package for any company willing to do business in American Samoa a reality.

Economic Development

In addition to promoting federal tax incentives for businesses willing to invest in setting up shop in American Samoa, ASG is pursuing a number of complimentary initiatives such as streamlining the business permitting and licensing process in order to make the investment climate more business friendly. Through technical assistance funding from the Office of Insular Affairs, ASG will make the process of attaining a business license much simpler through electronic means. Additionally, the ASG will do away with the inefficient waiting periods in order for multiple agencies to sign off on permits by consolidating hearings and allowing for a "one-window" approach to electronically apply for licenses and permits through the internet and to electronically attach and store supporting documents and to make part of the licensing and permitting documentation. Approval of licenses and permits will take place electronically, without sacrificing the safeguards that any one agency provides.

ASG is also pursuing a number of new programs which will encourage investment in the territory, including the establishment and administration of the territory's Low Income Housing Tax Credit Program, which has the potential to infuse eighteen million grant-like dollars into the local economy, and help to foster our private construction sector. And this is in addition to the provision housing for our low-income population. Through technical assistance funding, we hope to bring this program into reality within the next two years.

These are only a few of the programs that ASG is able to pursue through the technical assistance funding available through the Office of Insular Affairs. This program is invaluable to our development as a territory, and I express my wholehearted support for its continuation and expansion into the future.

Operations Maintenance and Improvement Program (OMIP)

One of the biggest challenges that ASG deals with on a regular basis, especially given the corrosive nature of an island environment, is maintenance and improvement of facilities. Through the OMIP program, ASG is able to access funds that would otherwise have to come from other portions of the ASG budget. Currently, our own community college, ASCC is availing itself of the opportunity to set up its own maintenance program utilizing software that is currently being used in other insular areas.

Capital Improvement Projects

 Currently, American Samoa receives $10.5 million in CIP funding. This funding is directly responsible for developing critical infrastructure in the territory. From the construction of schools and hospital facilities, to the hardening of utilities, which aid in recovery following disasters, this funding is essential for developing the territory's infrastructure and making the territory more attractive for commerce. Again, it is my recommendation that this specific program be continued at its current level, and if possible, expanded to increase the funding of additional necessary infrastructure in the islands.

Island Fellows Program

Agencies of the American Samoa Government have benefited directly from the Office of Insular Affair's Island Fellows Program. One agency in particular, the Development Bank of American Samoa, is especially satisfied with this program. Over the past year, the Development Bank has increased the number of programs it administers and directly encourages the continuation of forward-thinking analysis of innovative young scholars as an aid to economic development.

Special Industry Committees

Of particular interest in recent months is the special industry committee process by which American Samoa's minimum wages are set. As I have stated in the past, it is the position of my administration that these special industry committees work for our territory. They are responsive and they take into account the unique factors presented by American Samoa's fledgling economy. Unless and until a more responsive and effective approach is proposed, I am asking this Committee for its support in maintaining the special industry committee system for setting minimum wages in American Samoa.

Conclusion

I once again thank you Mr. Chairman, as well as your distinguished colleagues for the opportunity to speak here today. It is my fervent wish that you keep American Samoa's plight in your thoughts as you consider the budget of the Office of Insular Affairs for the new fiscal year. Soifua.

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