Advanced remittance includes set-aside for war claims
Guam will receive an advance payment of $69.9 million in Section funds by Sept. 11, DOI Assistant Secretary Doug Domenech said. The amount includes all adjustments and the $18.3 million for Guam World War II Claims Fund set-aside, he added.
Guam's estimate for the 2020 Section 30 taxes was $81 million. Domenech said the 2020 advance request for Guam Section 30 has been increased by $7.25 million for adjustments owed for prior years.
“These adjustments include the 2017 military home of record cover over, 2016 private sector source income, 2016 Offshore Voluntary Disclosure, and 2018 Federal agency cover over amounts.,” Domenech said in a letter to Gov. Lou Leon Guerrero.
He noted that the 2018 Federal agency cover over has decreased due to the decrease in the tax amounts withheld from the paychecks of individuals related to the 2018 Tax Cuts and Jobs Act.
“We are pleased at the announcement of Section 30 funds from the Department of the Interior to the Government of Guam but have now also learned that another $18.3 million will be deposited into the Guam World War II Claims fund—money that our manamko’ are unable to access,” Leon Guerrero said.
She said the notice from DOI “underscores the importance for the Senate to act on H.R. 1365.”
If there is no action, she added, then the funds transferred to Treasury will continue to sit dormant in the Guam World War II Claims account, which has an estimated $20 million in it.
“Our administration pursued a local program to advance payments to War Survivors with adjudicated claims, recognizing that time is running out for our survivors of occupation. And in the absence of any progress by the Senate on H.R. 1365, I will continue to encourage our Guam Legislature to pass Bill 181-35 which enjoys bipartisan support,” Leon Guerrero said.
“As our delegate to Congress and sponsor of H.R. 1365, I have faith that the Congressman will remain focused on this very important legislation. While we are concerned that he may be distracted with other matters, I trust that Congressman San Nicolas is working closely with the Senate Judiciary Committee to pass this legislation when the Senate reconvenes next week. I have written multiple letters to Congress and will continue to appeal for the swift passage of H.R. 1365 when I visit our nation’s capital next month.”
The Section 30 money was part of the $328 million made available by the federal government to U.S. territories.
Under Guam’s Organic Act, federal income taxes derived from active members of the United States Armed Forces and pensions paid to retired civilian and military employees of the United States who reside on Guam are annually “covered-over” to the Guam Treasury to support the operations, activities, and programs of the local government.
U.S. Virgin Islands will receive $258,375,000 in rum tax cover-over payments for the estimated FY 2020 rum tax collections in the territory.
"These funds are important to Guam and the Virgin Islands governments and my team at the Office of Insular Affairs always works hard to ensure the funds are transferred as quickly as they are available,” Domenech said. “I expect the funds to be available by next week.”
(Through changes made under the National Defense Authorization Act of 2017 (U.S. Public Law 114-328, Section 1703) some of these funds are set aside for the Guam World War II Claims Fund at the Department of the Treasury.
Under the Revised Organic Act of the Virgin Islands, any excise tax collected on USVI manufactured rum imported into the United States is transferred to or “covered-over” to the USVI. The USVI Government submits an advance estimate of rum excise taxes to the Department of the Interior’s Office of Insular Affairs on an annual basis so that a payment can be made in September of each fiscal year.
Any adjustments necessary are calculated and paid later based upon amounts advanced from rum excise taxes derived from the USVI and actual receipts collected by the federal government