Senator Jesse Anderson Lujan Chairman, Committee on Aviation, Federal Affairs Labor, Housing, Banking and Insurance
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· '~ Senator Jesse Anderson Lujan Chairman, Committee on Aviation, Federal Affairs Labor, Housing, Banking and Insurance July 25, 2007 The Honorable Mark Forbes Speaker I Mina'Bente Nuebi Na Liheslaturan Guahan 155 Hesler Place Hagatiia, Guam 9691 O Dear Mr. Speaker: The Committee on Aviation, Federal Affairs, Labor, Housing, Banking and Insurance, to which was I_ I referred Bill No. 60 (EC), has completed committee consideration as required and wishes to report out Bill No. 60 (EC). Transmitted herewith for the Legislature's consideration and action is this committee's report on Bill No. 60 (EC). Committee members voted on Bill No. 60 (EC) as follows: ----3 TO PASS NOTTO PASS 3 TO REPORT OUT ONLY ABSTAIN INACTIVE FILE Thank you for your interest in this matter. DERSON LUJAN Enclosure I M.ina' Bente Nuebi Na Liheslaturan Gullhan •Twenty-Ninth Guam Legislature Suite 100, 655 South Marine Corps Drive, Tamuning, Guam 96913 Phone (671) 647-5373/5/6 * Fax (671) 647-5377 •e-mail: [email protected] Senator Jesse Anderson Lujan Chairman, Committee on Aviation, Federal Affairs Labor, Housing, Banking and Insurance July 3, 2007 MEMORANDUM TO: COMMITTEE MEMBERS FROM: CHAIRMAN SUBJECT: COMMITTEE REPORT- Bill No. 60 (EC) Transmitted herewith for your information and action is this Committee's report on BiJI No. 60 (EC): "AN ACT TO PROHIBIT THE GOVERNOR FROM TRANSFERRING FUNDS FROM THE ANTONIO B. WON PAT GUAM INTERNATIONAL AIRPORT AUTHORITY FOR GENERAL PURPOSES OF THE GOVERNMENT OF GUAM." Attached are the following: Conunittee Voting Sheet on Bill No. 60 Committee Report Public Hearing Sign-in Sheet Written testimony submitted 12 Guam Code Annotated§ 1224 - § 1226, restricting government from interfering with bond covenants Copy of March 5 faxed letter referred to during the public hearing on Bill 60 Bill No. 60 (EC) Referral of Bill No. 60 (EC) Correspondence and Notices of Public Hearing You are respectfully requested to indicate your reconunendation as to Committee and further legislative action on the subject appointment on the Committee Voting Sheet. If you have any questions or concerns on this matter, please do not hesitate to contact me. Attachments I Mina' Beote Nuebi Na Liheslaturan GuAhan *Twenty-Ninth Guam Legislature Suire 100, 655 South Marine Corps Drive, Tamuning, Guam 96913 Phone (671) 647 -5373/5/6 •Fax (671) 647-5377 •e-mail: [email protected] Senator Jesse Anderson Lujan Chairman, Committee on Aviation, Federal Affairs Labor, Housing, Banking and Insurance COMMITTEE VOTING SHEET Bill No. 60 (EC) AN ACT TO PROHIBIT THE GOVERNOR FROM TRANSFERRING FUNDS FROM THE ANTONIO B. WON PAT GUAM INTERNATIONAL AIRPORT AUTHORITY FOR GENERAL PURPOSES OF THE GOVERNMENT OF GUAM. TO PASS NOT TO TO ABSTArN TO PLACE SIGNA7 PASS REPORT IN OUT ONLY lNACTIVE / ' FILE Jesse Anderson Lujan, Chairman ~ -x\~ b\ Edward J.B. Calvo, Vice-Chairman ; 1,fi/f / Speaker Mark Forbes. Ex-officio Member k\ ~ Antonio R. Unpingco, Member #1 v Ray Tenorio, Member Frank F. Blas, Jr., Member ~ / Frank T. lshizaki, Member Adolpho B. Palacios, Sr., Member ff; ~ Rory J. Respicio, Member ~ ~· I Mina' Bente Nuebi Na Liheslaturan Gu:'l han *Twenty-Ninth Guam Legislature Suite 100, 655 South Marine Corps Drive, Tamuning. Guam 96913 Phone (67 1) 647-5373/5/6 * Fax (671) 647-5377 * e-m ail: [email protected] Senator Jesse Anderson Lujan Chairman, Committee on A viation, Federal Affairs Labor, Housing, Banking and Insurance COMMITTEE REPORT ON Bill No. 60 (EC) AN ACT TO PROHIBIT THE GOVERNOR FROM TRANSFERRING FUNDS FROM THE ANTONIO B. WON PAT GUAM INTERNATIONAL AIRPORT AUTHORITY FOR GENERAL PURPOSES OF THE GOVERNMENT OF GUAM. I Mi na' Be nte Nuebi Na Liheslaturan Gullhan •Twenty-Ni nth Guam Legislature Suite 100, 655 South Marine Corps Drive, Tamuning, Gua m 96913 Phone (671) 647-5373/5/6 •Fax (671) 647-5377 •e-mail: [email protected] I. OVERVIEW The Committee on Aviation, Federal Affairs, Labor, Housing, Banking and Insurance held a Public Hearing at 9:30 AM on March 27, 2007 in the Public Hearing Room, I Liheslaturan Guahan. On the Agenda for this Public Hearing was the Bill No. 60 (EC): "AN ACT TO PROHIBIT THE GOVERNOR FROM TRANSFERRING FUNDS FROM THE ANTONIO B. WON PAT GUAM INTERNA TION AL AIRPORT AUTHORITY FOR GENERAL PURPOSES OF THE GOVERNMENT OF GUAM." Bill No. 60 was introduced on March 6, 2007, and referred to this Committee for public consideration the fo llowing day. Public notice requirements for this hearing were met by notification of all media via e-mail on Monday, March 19 and Friday, March 23, 2007. The legislative Weekly Legislative Calendar of March 23 displayed the scheduled hearing. KUAM News acknowledged the Confirmation Hearing notice with a story broadcast on Monday, March 26. Live cablecast of the proceedings was carried on Marianas Cable Vision, channel 13. Senators present at the Public Hearing on Bill No. 60 (EC) included Chairman Jesse Anderson Lujan, committee member Senators Antonio R. Unpingco, Ray Tenorio, Frank F. Blas, Jr. and Adolpho B. Palacios; and Senator Tina Rose Muna-Barnes. The Public Hearing on Bill No. 60 (EC) was called to order at 10: 10 A.M. II. SUMMARY OF TESTIMONY The Honorable Frank F. Blas appeared before the Committee representing himself, not as Chairman of the A.B. Won Pat Guam International Airport Authority Board of Directors, or on behalf of the Board. He said that the Board did not have a chance to meet and discuss Bill No. 60. He tendered a formal written testimony (attached), and summarily discussed the reasons why the Airport was taking a position in support of Bill No. 60: (1) GIAA enabling legislation is clear that the airport will operate independently. (2) Bond covenants do not permit use if airport revenues for any other thing. The airport's bond rating was upgraded to BBB, but talk of diverting revenues creates nervousness in the bond market. He asked Senators to consider the viewpoint of bond holders. GIAA is obligated to make sure revenues· are there. (3) GIAA is heavily dependent on federal funds, from the Federal Aviation Administration, Federal Highway Administration, and the military. Blas stated that Bill 60 is not needed, except to remind leaders that policy to take funds from the Airport will jeopardize the well being of GIAA. BJas suggested expanding the bill to include other agencies and branches of government. Airport Deputy Manager Edith Pangelinan appeared to comment on bill 60. She clarified that she is not against the Governor's efforts, but the Airport will be penalized. GIAA is now fortunate, and needs to protect its assets. She referred the Committee to the airport's legal counsel, who was prepared to testify and comment. Atty. Maria Cenzon-Duenas appeared in her capacity as GIAA counsel with firm Mair, Mair, Spade & Thompson. She described Bill 60 as "codified already". Since 1975, the airport has been required to be self-sufficient. That's why it can charge rents and use fees. Bond covenants run for another 16 years. Federal regulations on the over $100 million grant funds for airport improvements require all users to pay fair market rent, and prohibit revenue diversion. Chairman Lujan thanked Chairman Blas for everything he has done at and for the Airport Authority. Citing a letter addressed to the Airport and the Guam Power Authority, Lujan stated that GPA would have been included in Bill 60 if the letter had been released earlier. Lujan described the Legislature as derelict if it did not act to prevent violation of bond covenants. He cited concerns expressed by the FAA and calls from bondholders. Chairman Lujan inquired about amounts owed by the government of Guam to the Airport. Chairman Blas stated that at least $600,000 was owed by Guam Police Department to GIAA, and that the auditors were raising this issue. Blas stated that the parties were negotiating on crediting the value of GP D's improvements to the buildings against rent. Atty. Cenzon-Duenas added that Guam Fire Department also owes rent. Crediting value of offsetting services does not satisfy the requirement of collecting fair market rent. There is a standard procedure to determine "fair" rates, which are different from the terminal to other types of buildings. GPD does not have enough appropriations or cash. Trying to quantify the value of GPO services is difficult, when airport has its own police force. Senators raised possibility that autonomous agencies can contribute to GovGuam because underlying land and buildings were built by GovGuam. In response, Chairman Blas stated that before GIAA was made autonomous in 1975 the government could have included itself as a beneficiary in airport revenues. Since then, it has not lent a hand to GovGuam. Since issuance of bonds, consideration of taxpayers is not possible. FAA stepped in when LAX revenues were diverted to the City of Los Angeles, describing it as a "diversion case". 12 GCA § 1226 provides similar prohibition against diverting airport funds. When asked if 12 GCA § 1224 could be interpreted as allowing GIAA to borrow on behalf of GovGuam, Atty. Cenzon-Duenas responded that that section must be read in conjunction with other laws, which impose restrictions. Senator Frank F. Blas Jr. derided creative interpretations of statutes. Airport funds are for specific purposes; there is a cost to using them for general purposes. He suggested going back to read the original agreements. He agreed with the suggestion to include the legislature and Judiciary among those entities covered by Bill 60, and asked whether the prohibitions against use of "funds" should be expanded to include assets, tangible items, and services. Chairman Blas responded that those would be a good policy idea, citing the example of Chamorro Village asking to use the airport's night light carts as a diversion of funds.