Chapter 70

COL12010612GCA AUTONOMOUS AGENCIES CH.70HOTEL DEVELOPMENT 1CHAPTER 70 HOTEL DEVELOPMENT § 70101. Legislative Finding. § 70102. GEDA to Promote Hotel Development. § 70103. Same: Powers and Responsibilities. § 70104. Same: Definitions. § 70105. Business Privilege and Use Tax Exemptions. § 70106. Consideration to ex isting hotels. § 70107. [untitled] § 70108. >Sunset=Provision . § 70109. [untitled] § 70110. Title. § 70111. Southern Economic Incentive Region. § 70112. Tax Rebates, Abatement and Exemption Benefits for Home Contractors or Developers. § 70113. Amendme nt to Rules. § 70114. Severability. § 70101. Legislative Findings. Additional hotel accommoda tions and tourist facilities and services areessential to the further development of Guam’s tourist industry, now the island’s principal industry, in view of the downsizing of the territory’s military facilities. Additional hotel accommodations and tourist facilities will create jobs to take the place of those lost in such military base closures. The provision of such additional accommodations and facilities is declared to be a public purpose.

tourist facilities will create jobs to take the place of those lost in such military base closures. The provision of such additional accommodations and facilities is declared to be a public purpose. In addition, substantial funds are needed to 'jump start' the provision of affordable housing for the people of Guam, and the Legislature finds that such funds might b e obtainable from hotel and tourist facility developers in ex change for enlarged tax benefits. Accordingly, the enlargement of tax benefits to those developers which make funds available for affordable housing is declared to be a public purpose. SOURCE: GC §53609, as added by P.L. 16 -87. Amended by P.L. 23 -135:1. § 70102. GEDA to Promote Additional Hotels and Tourist Facilities. The Corporation shall promote the construction of new hotels, the expansion of existing hotels, and the construction of tourist facilities for COL12010612GCA AUTONOMOUS AGENCIES CH.70HOTEL DEVELOPMENT 2the adequate accommodation, amusement of, and service to tourists and other visitors to Guam. SOURCE: GC §53609.1, as added by P.L. 16 -87. Amended by P.L.23 -135:2. § 70103. Same: Powers and Responsibilities.

te accommodation, amusement of, and service to tourists and other visitors to Guam. SOURCE: GC §53609.1, as added by P.L. 16 -87. Amended by P.L.23 -135:2. § 70103. Same: Powers and Responsibilities. The Corporation is authorized and empowered to do all things necessary or appropri ate to carry out the purposes of this Article. It is expressly autho rized: (a) Information on tourism. To work with the Guam Visitors Bureau and other concerned agencies to collect and disseminate information concerning Guam’s tourist industry and the financia l incentives offered by the government of Guam for the development, operation and ownership of hotels and tourist facilities in Guam; (b) Coordination with government agencies. To assist persons interested in building or expanding hotels or tourist facilit ies in Guam in obtaining information from and coordi nating with government of Guam agencies, public corporations and Federal agencies represented in Guam; (c) Information on financing. To assist those persons interested in building or expanding hotels or tourist facilities in Guam in obtaining financing by maintaining and dissemi nating information regarding financing available through private

ose persons interested in building or expanding hotels or tourist facilities in Guam in obtaining financing by maintaining and dissemi nating information regarding financing available through private and public sources; and (d) Feasibility studies. To provide administrative and financial assistance, on such terms and upon such conditions as the Board may det ermine, with r espect to the preparation of feasibility studies relating to specific proposals for the development or expansion of hotels or tourist facilities in Guam. SOURCE: GC §53609.2, as added by P.L. 16 -87. Amended by P.L. 23 -135:3. § 70104. Same: Definitions. For purposes of this Article and unless the context otherwise requires, Hotel means a building or buildings containing not less than two hundred (200) guest rooms held out to the public as a place wher e all transient persons, including but not limited to tourists, who come will b e accommo dated and entertained as guests for compensation whos e facilities are open to the public as a whole; and tourist facility means a building or buildings whose const ruction cost is not less than Five COL12010612GCA AUTONOMOUS AGENCIES CH.70HOTEL DEVELOPMENT 3Million Dollars

to the public as a whole; and tourist facility means a building or buildings whose const ruction cost is not less than Five COL12010612GCA AUTONOMOUS AGENCIES CH.70HOTEL DEVELOPMENT 3Million Dollars ($5,000,000) offering for compensation, sustenance, entertainment, or amusement of tourists, other transients, and other members of the public, the activities of which facility the Board finds beneficial t o the development of Guam’s tourist industry. SOURCE: GC §53609.3, as added by P.L. 16 -87. Amended by P.L. 23 -135:4. § 70105. Business Privilege and Use Tax Exemptions. (a) Business Privilege Tax.The pr oceeds from any contract for building materials or su pplies, or for labor or supervision used in the construction of any new hotel or tourist facility in Guam, or for the expansion of any existing hotel, or for the development of afford able housing, shall be exempt from the tax imposed under Article 2 of th e Business Privilege Tax Law; provided , that: (a) the person providing the materials, supplies, labor or supervision has received a certificate of exemption from the Corporation; and (b) the person claims the exemption within the following period: within o ne (1) year of the

aterials, supplies, labor or supervision has received a certificate of exemption from the Corporation; and (b) the person claims the exemption within the following period: within o ne (1) year of the date that such materials, supplies, labor or supervision are furnished. The Corporation shall adopt reasonable rules and regulations in accordance with the Administrative Adjudication Law for the granting of certificates of exemption in order to ensure that certificates are issued only with respect to materials, supplies, labor or supervision furnished subsequent to the effective date of this Article and for the construction or expansion of a qualifying hotel or tourist facility, or devel opment of affordable housing as defined by the Authority. In addition, the Corporation shall require that the Beneficiary of a certificate of exemption comply with the same r equir ements of a Beneficiary of a Qualifying Certificate ( >QC=) as set out in Titl e 12 Guam Code Annotated §§58116 through 58119. (b) Use Tax. The owner of a hotel or tourist facility con structed under a contract, the proceeds from which have been exempted under this Section from the tax imposed under Article 2 of the

h 58119. (b) Use Tax. The owner of a hotel or tourist facility con structed under a contract, the proceeds from which have been exempted under this Section from the tax imposed under Article 2 of the Business Privileg e Tax law, shall be exempted from the Guam Use Tax Law, with respect to the property used to construct, furnish and equip the hotel or tourist facility, for a similar period. (c) Offset of Taxes if Paid. In the event the contractor, supplier or owner, othe rwise eligible for the tax exemptions authorized by this Section, has paid the taxes because the Corpora tion=s rules and regulations had not been adopted and promulgated at the times the taxes were required to be paid, such contractor, or supplier or owne r shall be entitled to an offset of such taxes against future taxes, without interest, COL12010612GCA AUTONOMOUS AGENCIES CH.70HOTEL DEVELOPMENT 4on presentation to the Director of Revenue and Taxation of a certificate of exemption issued by the Corporation to such contractor, supplier or owner. SOURCE: GC §53609. 4, as added by P.L. 16 -87. Amended by P.L., 23 -135:5. Amended by P.L. 24 -266:1. § 70106. Consideration to Existing Hotels.

the Corporation to such contractor, supplier or owner. SOURCE: GC §53609. 4, as added by P.L. 16 -87. Amended by P.L., 23 -135:5. Amended by P.L. 24 -266:1. § 70106. Consideration to Existing Hotels. The Board shall exercise its powers with respect to this Article so as to promote the construction of new hotels, the expansion of existing hotels, and the construction of tourist facilities in an orderly manner and with due regard being given to the profitability of existing hotels and tourist facilities. SOURCE: GC §53609.5, as added by P.L. 16 -87.Amended by P.L. 23 -135:6. § 70107. (a) Tax Rebates on Certain Rental Income . A qualifying certificate granting a rebate of up to fifty percent (50%) of all income tax paid to the gover nment of Guam by a Beneficiary on income derived from the lease of land, buildings, machinery or equipment toa Beneficiary of a qualifying certificate issued for affordable housing or for a hotel or tourist facility covered by the provisions of this Chapter may be issued for a period not to exceed five (5) consecutive years from the effective date of a qualify ing certificate therefor, and a rebate of up to twenty -five percent (25%) of such income tax

may be issued for a period not to exceed five (5) consecutive years from the effective date of a qualify ing certificate therefor, and a rebate of up to twenty -five percent (25%) of such income tax for a period not to exceed the next five (5) consecutive years; provided , that an application for such rebate is made within the effective period(s) of this Articl e, as set out in § 70108, infra .@ (b) Income Tax Rebate on Sales to Developers. A rebate of up to fifty percent (50%) on all taxes paid to the government of Guam by a Beneficiary on income derived from the sale of land or other real property to a developer of a hotel, of a tourist facility, or of affordable housing covered by the provisions of this Chapter may be issued; provided , that an application of such rebate is made within the effective period(s) of this Chapter, as set out in § 70108, infra . SOURCE: GC §53609.6, as added by P.L. 16 -87. Repealed by P.L. 22 -85:2 (3/3/94) and remaining funds reversed to the Tourist Attraction Fund by the same §2.Amended by P.L. 23 -135:7. Amended by P.L. 24 -266:2. § 70108. >Sunset=Provision.COL12010612GCA AUTONOMOUS AGENCIES CH.70HOTEL DEVELOPMENT 5This Article shall take eff

Attraction Fund by the same §2.Amended by P.L. 23 -135:7. Amended by P.L. 24 -266:2. § 70108. >Sunset=Provision.COL12010612GCA AUTONOMOUS AGENCIES CH.70HOTEL DEVELOPMENT 5This Article shall take eff ect on its approval by I Maga=lahen Guahan and sha ll remain in effect until January 1, 2002, at the expiration of which period this Article shall automatically be deemed repealed; provided , however, that the Board, at its discretion, may extend the effect iveness of this Article to January 1, 2004 by adopting a resolution to such effect prior to January 1, 2002 and provided , further, that any qualifying certificate issued for a period expiring after January 1, 2002, or after January 1, 2004, if the effectiv e period has been extended, shall remain in full force and effect until its particular term expires or it is canceled on other grounds. The tax rebate on sales to developers authorized by § 70107 of this Article is available to the Beneficiary for any tax year, any part of which falls before January 1, 2003, or before January 1, 2005, if the Article =s effective period has been extended. SOURCE: GC §53609.7, as added by P.L. 16 -87.Amended by P.L. 23 -135:8. Amended by P.L.

falls before January 1, 2003, or before January 1, 2005, if the Article =s effective period has been extended. SOURCE: GC §53609.7, as added by P.L. 16 -87.Amended by P.L. 23 -135:8. Amended by P.L. 24 -266:3. § 70109. (a) Increase in B enefits to Developers Who Make Funds Available for Affordable Housing. In order to initiate the immediate construction of affordable housing on Guam, the Board is authorized to recommend to I Maga=lahen Guahan and I Maga=lahen Guahan is authorized to issu e to each of those develop ers of hotels or tourist facilities which qualify a qualifying certificate with a rebate of up to one hundred percent (100%) of all income tax paid to the government of Guam by the Beneficiary on income received from the activiti es of the hotel or tourist facility identified in the qualifying certificate, which rebate may be authorized for a period not to exceed twenty (20) consecutive years from the effective date of the qualifying certificate. (b) Cash Loans by Applicants for En larged Benefits. In order to qualify for the increased percentage of rebate of income tax as authorized by this § 70109, an applicant therefor must agree to loan to the affordable housing

ants for En larged Benefits. In order to qualify for the increased percentage of rebate of income tax as authorized by this § 70109, an applicant therefor must agree to loan to the affordable housing fund ( AHousing Fund @) to be established by the Corporation the sum o f Five Million Dollars ($5,000,000) for a period of up to five (5) years. The applicant shall make such loan to the Housing Fund contemporaneously with the issuance of the qualifying certificate by I Maga=lahen Guahan . Such loan shall be repaid to the appl icant without interest, as provided in subparagraph (c), infra . Until such loan is repaid COL12010612GCA AUTONOMOUS AGENCIES CH.70HOTEL DEVELOPMENT 6to the Benefi ciary, any interest accrued thereon while the loan is in the Housing Fund is the property of the Housing Fund. (c) Housing Fund. The Corporation shall e stablish on its books, separate and apart from its other funds, the Housing Fund described in Subparagraph (b), supra . Utilizing only the interest on the loans in the Housing Fund, the Corporation, working in cooperation with the Guam Housing Corporation ( >GHC=), shall design and develop the necessary supporting infrastructure for affordable housing

loans in the Housing Fund, the Corporation, working in cooperation with the Guam Housing Corporation ( >GHC=), shall design and develop the necessary supporting infrastructure for affordable housing projects, such as, but not limited to, roads, waterlines, sewer lines, power and telephone lines and other utilities. Each loan in the Housing Fund shall be rep aid in full without interest to the Beneficiary no later than five (5) years from the date the loan was deposited in the Housing Fund. (d) Applicability of Other Provisions of the QC Law. The provisions of Chapter 58 of Title 12 of the Guam Code Annotated, respecting qualifying certificates, shall apply to the qualifying certificates issued under this § 70109, except with respect to the maximum percentage of rebate of income tax permitted. A Beneficiary may be a Subchapter AS@ Corporation, a trust, partner ship or limited liability company, and it must otherwise comply with the requirements of that Article with respect to the filing of applications and the publication of notice. A hotel or tourist facility developer which would qualify for assistance under t he other provisions of Chapter 70 of this Title can, with respect to

ng of applications and the publication of notice. A hotel or tourist facility developer which would qualify for assistance under t he other provisions of Chapter 70 of this Title can, with respect to a rebate of its income tax, either agree to loan Five Million Dollars ($5,000,000) and obtain a maximum of one hundred percent (100%) rebate for a maximu m of twenty (20) years, or not mak e any such loan, and receive a maximu m rebate of seventy -five percent (75%) for a maximum period of twenty (20) years. (e) Affordable Housing Program. The Corporation shall, to the extent feasible, achieve economies of scale in its development of infrastru cture for affordable housing, by utilizing as few contrac tors, architects and engineers as possible, and by utilizing modern construction techniques so as both to speed the construction of such infrastructure and lower its cost. SOURCE: GC §53609.8, as ad ded by P.L. 16 -87.Amended by P.L. 23 -135:9. Amended by P.L. 24 -266:4. § 70110. Title.COL12010612GCA AUTONOMOUS AGENCIES CH.70HOTEL DEVELOPMENT 7This Act [Sections 70110 -70114] may be cited or referred to as >The Southern Economic Incentive Construction Act of 2000 =.

§ 70110. Title.COL12010612GCA AUTONOMOUS AGENCIES CH.70HOTEL DEVELOPMENT 7This Act [Sections 70110 -70114] may be cited or referred to as >The Southern Economic Incentive Construction Act of 2000 =. SOURCE: Sections 70110 -70114 (as renumbered b y Compiler) have been added by P.L. 25 -124:2 -6. § 70111. Southern Economic Incentive Region. For purposes of this Act, the following villages and municipalities shall constitute the Southern Economic Incentive Region: Piti, Santa Rita, Agat, Umatac, Meri zo, Inarajan, Talofofo and Yona. § 70112. Tax Rebates, Abatement and Exemption Benefits for Home Contractors or Developers. In order to participate in the tax rebates, abatement and exemption benefits for home contractors or developers (Benefits Program) established in 12 GCA §§ 70107 and 70109, the respective home contractor or developer shall apply to the Guam Economic Development Authority ( >GEDA=) prior to the commencement of construction of affordable housing or renovation thereof of existing structure . § 70113. Am endment to Rules. To effectuate the intent of this Act, the Guam Economic Development Authority ( >GEDA=) together with the Guam Housing Corporation ( >GHC=) shall,

f existing structure . § 70113. Am endment to Rules. To effectuate the intent of this Act, the Guam Economic Development Authority ( >GEDA=) together with the Guam Housing Corporation ( >GHC=) shall, within thirty (30) days upon enactment, amend the existing rules and shall subm it the same to I Liheslaturan Guåhan for review and approval. § 70114. Severability. Ifany provision of this Law or its application to any person or circumstance is found to be invalid or contrary to law, such invalidity shall not affect other provisions or applications of this Law which can be given effect without the invalid provisions or applications, and to this end the provisions of this Law are severable. ----------