Hagatna, Guam — The Committee on Economic Investment, Military Buildup, Regional Relations, Technology, Regulatory Affairs, Justice, Elections and Retirement publicly heard Bill 102-38 on Oct. 17. Introduced by Senator Will Parkinson, the bill seeks to establish the Guam Tariff Advantage Development Act (GTADA) to leverage Guam’s tariff-exempt status under General Headnote 3(a)(4) of the U.S. Harmonized Tariff Schedule to attract manufacturing and duty-free exports to the U.S. mainland.

Senator Will Parkinson said Guam’s status outside the U.S. customs territory lets the island import raw materials duty-free, substantially transform or assemble them locally with at least 30% local value added, and then export finished products duty-free to the U.S. mainland under federal rules. Parkinson said GTADA would create tariff advantage zones with infrastructure, a special qualifying certificate (QC) category offering tax rebates and abatements, and workforce-development obligations for participating firms.

Key incentives described in the bill and fiscal note include corporate income-tax rebates of up to 75% for up to 20 years, dividend-tax rebates up to 75% for up to five years, and 100% abatement of real-property taxes for up to 10 years, conditioned on employment and investment benchmarks. The bill would require QC beneficiaries to hire at least 60% Guam residents and authorize expedited permitting in coordination with relevant agencies.

Agency testimony highlighted implementation challenges and limits of authority. Christina Garcia, chief executive officer and administrator of the Guam Economic Development Authority, told the committee GEDA supports the intent but said GEDA does not have authority to issue the specific export certifications required under General Headnote 3(a)(4); those certifications require Guam Customs and Quarantine Agency (CQA) and may be ultimately approved by U.S. Customs and Border Protection. GEDA also said its industrial parks are near full capacity and that the bill does not provide funding for the new programs it would be required to administer.

Guam Customs and Quarantine Agency voiced support for the bill’s intent but recommended statutory changes that would place certification and operational responsibilities with CQA. CQA advised the committee to add language authorizing CQA to collect fees to recover inspection, audit and compliance costs tied to certification. Chief Vincent Asamp Perez said CQA and customs operations lack sufficient staffing and estimated that standing up a certification and inspection program would require startup costs in the range of $1.5 million to $2 million and significant new hires.

Budget office (BBMR) analysis dated May 22, 2025 warned the bill’s mandates could be unfunded and that GEDA lacks funding and property inventory to carry out the bill’s development programs. Committee members discussed options: keep tax incentives in the existing QC statute; direct GTADA rulemaking toward agencies with line authority; or restructure the bill so customs would manage certification and GEDA would lead investor outreach and facilitation.

Why it matters: Backers said GTADA could create skilled jobs and diversify Guam’s economy by building a manufacturing base that can export duty-free to the U.S. mainland. Agencies cautioned that the program would require upfront investment, new operational capacity at CQA and coordinated planning with federal authorities to secure the tariff treatment envisaged by the bill.

Process and next steps: The bill was heard; no committee vote was taken. The chair invited further collaboration and suggested the author may revise the bill to reflect agency roles and funding needs before markup or referral to the appropriate oversight committee.