By Mar-Vic Cagurangan
Variety News Staff

THE old permit, license and service fees may have to remain in place until the effective date of the new fee schedules under the revised budget law is clarified, Department of Revenue and Taxation director Art Ilagan said yesterday.
Bill 74, now Public Law 29-02, also requires the Department of Revenue and Taxation to notify the public about the new fee schedules within 10 days of the enactment of the legislation.
The revised budget measure provides that fee increases would go into effect on May 1. However, the Legislature passed the bill on May 4 and Gov. Felix P. Camacho just signed it into law Friday.
“Now that the bill has become law, I will have to start notifying the public through the media or through the mail. Business owners who are affected by the new budget law will receive letters from us,” Ilagan said.
Ilagan said he will seek a legal opinion from the Attorney General’s Office to clarify when exactly the fee increases are to take effect.
“The law says we have to conduct a 10-day public notification before implementing the fee increases. I have to ask the AGO to clarify when exactly the fee increases start,” Ilagan said.
“Right now, our system is not yet set up to accommodate the new rates. Those applying for permits or licenses will pay the old rates, but if the AGO says the new rates are retroactive to May 1, then we will have to bill them for additional charges later,” the tax director added.
P.L. 29-02 pegs the 2007 budget at $471 million and raises government revenues by increasing permit, license and service fees, implementing property tax amnesty, and reducing the number of businesses exempted from the gross receipt tax.
In a statement after signing the bill Friday, Camacho urged the Legislature to expand the government’s revenue base in fiscal year 2008 “to reflect the true level of business activity occurring on island.”
The governor specifically asked the Legislature to review all GRT exemptions currently provided for in the law.
The final version of the new budget measure is a product of revisions and amendments made by senators on the governor’s original bill. The Legislature denied the governor’s proposal for a GRT raise and a $30 million borrowing authority.
The Legislature reinstated the original appropriations for certain agencies such as law enforcement and health departments, despite the governor’s proposal for a 1 percent across-the-board funding reduction.
Camacho, who signed Bill 74 “with great reservations,” said the exemptions from funding cuts granted by the Legislature to some agencies “have created an even greater disparity even among the critical services of health, safety and education.”
The governor said the administration’s financial advisors from Banc of America Securities have analyzed the impact of the bill.
“While there are many concerns regarding the final version of this bill, it is the assessment of this administration that a veto of the bill would cause greater harm to the future viability of this government and its ability to deliver critical services to the people of Guam,” the governor said in a press statement after signing the bill Friday.
Despite his misgivings, the governor expressed confidence that the revised budget law would bring additional revenues into the government’s treasury.
Camacho said the administration is still revising the FY 2008 budget and will submit it to the Legislature at a later date.