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Terlaje: Why tap local funds for business rescue program when governor has $569M at her disposal?


Speaker Therese Terlaje

By Pacific Island Times News Staff


Small businesses on Guam whose operations were disrupted by the Covid-19 pandemic may begin applying for the Local Employers’ Assistance Program or LEAP, which will officially launch at 8 a.m. on Dec. 20, the governor's office announced Thursday.


Established through an executive order, LEAP is funded through the $569 million in federal funds authorized by the American Rescue Plan.


“We have prioritized LEAP funding for small businesses that experienced severe levels of pandemic-related interruption," Gov. Lou Leon Guerrero said. "This ensures that our economy remains active in anticipation of what we all hope are prosperous days ahead.”


At the Guam Legislature, senators on Wednesday passed their own version of LEAP that would be drawn on the general fund, a proposal that received the thumbs down from Speaker Therese Terlaje.


"While I support assisting employees and businesses recover from the negative impacts brought on by the pandemic, I cannot ignore that the administration has had full discretion and flexibility of over $569 million in ARP funds since May 2021 to launch direct assistance programs such as LEAP and does not need to tap or wait for local funds to implement or fully fund such programs," said Terlaje, the lone senator who voted against Bill 214-36.


Terlaje noted that ARP funding was awarded to American communities to assist all sectors hardest hit by the pandemic, including small businesses.


"It was clear from discussions with the administration on Bill 214-36 during session that ARP funds could be programmed to fully fund the $50 million LEAP program," Terlaje said.


She said local funds must be reserved for critical services and needs that are not eligible for ARP funding.

"Amendments to the bill were proffered to require the use of federal funds like ARP funding first before using local funds," Terlaje said. "I supported this amendment but it ultimately failed. Without this provision, I could not support Bill 214-36 as written when ARP funds are available and a more suitable source."


Bill 214-36, known as the Local Employers' Assistance Program Act, commits $25 million from the general fund toward the administration's LEAP. The governor's executive order earmarked $25 million for the program.


“From the get-go, the LEAP Act has represented a collaborative effort from leaders in our government—a response to the call for help from the many businesses most impacted by this pandemic,” said Sen. Amanda Shelton, the bill's author. “This measure will keep our people working and provide relief to businesses most impacted by the pandemic.”

In Adelup, the governor's office said LEAP funding will be prioritized for small businesses with an interruption rate of at least 50 percent; and establishments covered by restrictions imposed by the Department of Public Health & Social Services. To be eligible, the "covered establishment" must be able to demonstrate a minimum of 20 percent business loss.


LEAP provides loans to small businesses that meet all eligibility criteria, chief among them a demonstration of business interruption experienced as a result of the Covid-19 pandemic.


Loan funds can be used for eligible business operating expenses with a focus on ensuring that businesses have adequate resources to maintain and possibly increase employment. Loans may be forgiven if at least 60 percent of all proceeds are used for eligible employee wage and benefit costs.


“The pandemic continues to present significant challenges to our economy. To support revitalization efforts, my administration has distributed over $90 million in direct aid to local small businesses,” the governor said.


“LEAP is an important tool that will create job opportunities and strengthen our economic recovery,” said Lt. Gov. Josh Tenorio. “The relief and strategic help provided through this robust program supports the stabilization of our tourism industry and other businesses that suffered profound pandemic losses. I strongly encourage all eligible small businesses to apply.”


“On behalf of GEDA, I would like to extend our thanks to Governor Leon Guerrero and the 36th Guam Legislature for mobilizing funds to help our hardest hit small businesses through LEAP,” said GEDA CEO and Administrator Melanie Mendiola. “As with the other assistance programs, we aim to review and award LEAP loans as swiftly and efficiently as possible.”


The full program guidelines, application and other information can be found on the GEDA website. Applications will be accepted via email at leap@gedagrant.com or drop box at the GEDA offices located on the fifth floor of the ITC Building in Tamuning beginning at 8 a.m. on Dec. 20. For the health and safety of the public, email submissions are strongly recommended.




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