Gov asks Fono for speedy passage of bill to pay outstanding court judgements
Gov. Togiola Tulafono has submitted for Fono approval two High Court judgements, including the more than $6 million, funded by proposed new increases in taxes and fees, to pay for the Progressive Insurance Company's civil claim against the American Samoa Government over the fire about a decade ago that destroyed the old Laufou Shopping Center.
The High Court issued on Aug. 27 an “alternative writ” commending the governor to, on or before Sept. 7, forward legislation to the Legislature appropriating funds for the payment of petitioner’s judgement in the amount of $6 million plus post-judgement interest at 6% from July 24, 2007 to the date of payment.
In the alternative, to show cause before the court on Sept. 14, 2012 “why you have not done so,” the order states.
The governor, in a letter dated Sept. 7, but received by the Fono on Monday this week, included the proposed appropriation for $6 million plus post judgement interest for this case.
“The intent of this newly revised bill is to provide specifically for a stream of revenue for payment of the judgement through new taxes and increases to current taxes and fees,” the governor wrote and sought the Fono’s “speedy passage” of the legislation.
Among of the proposed funding sources of the judgement is an increase in the excise tax for beer, alcoholic beverage and tobacco. An identical administration bill submitted last year was rejected by the Fono.
Another funding source is a hike in business licenses fees, which is the same as those proposed last year, that has since been rejected by the Senate. The proposed new license fee hike calls for the alcoholic beverage importer and vendor fee to increase from $1,000 to $2,100 annually; while the beer tavern fee would increase from $50 to $350 and an alcoholic beverage license jumps from $75 to $535 annually. The proposal says 65% of the fee collected goes to payment of the judgement.
Two other funding sources — also identical to those submitted last year and rejected by the Senate — are a new $2,000 corporate franchise tax and a new 4% wage tax, which is to be paid by all wage earners in the territory.
The proposed new 4% wage tax is separate from the current American Samoa income tax cited in local statute and the 2% wage tax, enacted into law this year, to first repay the $3 million loan for LBJ Medical Center and thereafter go to LBJ operations.
(Samoa News notes this would then add up to a total of 10% for the American Samoa income tax amount to be paid by taxpayers.)
It’s unclear as to when this measure will be officially introduced in both chambers and what action — if any — the Fono will take.
In the second judgement, the governor says the measure appropriates $95,000 from the claims and damage fund to pay in full a settlement agreement reached by parties in a civil case in the High Court in which ASG is the defendant.
The agreement in this case “contains a confidentiality provision and as such the Office of the Attorney General will best be able to answer any inquiries or concerns which you or your colleagues may have as you consider this legislation,” Togiola wrote a Sept. 10 letter to the Fono and asked passage of this proposal to resolve this judgement.
The claims and damage fund is overseen by the Attorney General’s Office, who can pay claims that are less than $25,000 but any judgement more than this ceiling requires Fono approval.
It's not immediately clear as to how much money is left in this account, which was allocated only $175,000 in the current fiscal year and a proposed budget of $200,000 in FY 2013.