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House sets August hearing for user fee reduction
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Posted on Jul 23 2005
The House Ways and Means Committee will open to the public discussions on the proposed user fee reduction in early August.
House Ways and Means Committee chair Norman S. Palacios said his panel is set to hold the hearing on Aug. 3 at the House chamber on Capitol Hill.
“We want to know what the public has to say on this issue so we are inviting people in,” said Palacios.
House members earlier voted to refer back House Bill 14-325 to the committee for further analysis.
The measure, authored by majority leader Oscar M. Babauta, aims to reduce the existing 3.7 percent garment user fee to 2.7 percent to boost the local apparel industry’s ability to compete globally amid the worldwide lifting of trade quotas.
The bill said the reduction in user fee is necessary in view of the ongoing downsizing and closures of factories within the garment industry.
Babauta said the 1 percent reduction would serve as an “incentive” so that the Commonwealth garment industry “can remain viable and contribute to the Commonwealth’s efforts for economic revitalization.”
Further, he said that the reduced rate—as a local remedy—would complement the ongoing work at the national level for the amendment of Headnote 3(a) of the U.S. Harmonized Tariff Schedule.
The amendment would allow local garment factories to increase the maximum allowable foreign content material on their products from 50 percent to 70 percent.
A CNMI delegation, headed by Lt. Gov. Diego T. Benavente and Washington Rep. Pete A. Tenorio, left for Washington D.C. last week to lobby for the federal amendment.
Benavente said that based on consultations with congressional leaders, there is a good possibility that the particular provision would be amended.
The government has projected that the decline in garment industry would result in 20 percent loss in user fee.
The government used to receive an average of $30 million a year in garment user fees.
Overall, taxes derived from the industry, which totals some $70 million a year, forms a third of the government’s budget.
