Bill to develop distribution center could create jobs

PORT: The entry gate to the Jose D. Leon Guerrero Port Authority of Guam is pictured on Oct. 11, 2019. Guam senators on Tuesday discussed legislation to develop a distribution center industry on the island for goods that need to be shipped internationally. Norman M. Taruc/The Guam Daily Post

Establishing a distribution center industry on Guam where goods could be built or assembled and then sold locally or abroad was the topic of discussion during a public hearing held by the Legislature's Committee on Economic Development, Agriculture, Maritime Transportation, Power and Energy Utilities, and Emergency Response Tuesday.

Bill 218, authored by Sen. James Moylan, aims to create a qualifying certificate under the Guam Economic Development Authority to offer tax incentives to entice business to set up a distribution or fulfillment center on Guam.

Moylan said the measure is meant to spur economic activity and create jobs.

GEDA Deputy Administrator Ricky Hernandez said the authority supports the intent of the bill but suggested some adjustments.

Hernandez recommended a portion of the bill that requires at least 50% of the product be assembled on Guam in order to qualify for tax incentives be amended to require the QC holder pay for the cost for the monitoring and compliance review of the requirement because it would be “quite onerous for the GEDA compliance division.”

American President Lines General Manager Charlie Hermosa testified about the benefits of having such an industry on Guam.

Hermosa, who told the panel of his experience running a distribution center in Puerto Rico, said establishing the industry here would help alleviate issues currently affecting global commerce.

“We see today what the coronavirus is doing to the Asia-Chinese market. There is a lot of scrambling right now that is going on for manufacturing, vendors trying to source products, they are trying to divert and source from other regions in the world,” he said. “If (the businesses) don’t have those logistical pipelines set in place there is going to be a lag in being able to produce the goods that the people around the world need.”

Hermosa, who also teaches a class in entrepreneurship at the University of Guam, said the talent he sees in his students gives him assurance the ideas and desire to fuel such an industry already exist on Guam.

“They are our new generation, our workforce,” Hermosa said.

“We have a good workforce we can utilize in a new industry, such as what this bill is trying to create,” he said. “This bill not only attracts investors, this bill allows for an industry to be created within Guam that allow us to put our name on it.”

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