Airai State imposes “impact fee” for all businesses
Airlines flying to Palau land at the sole international airport of the country that is situated within Airai State. (Rhealyn C. Pojas)
The Airai State had recently passed a law reducing business licensing fee yet imposing an impact fee for all types of businesses operating within the state.
The bill, which was approved by Airai State Governor Tmewang Rengulbai on September 25, 2018, imposes impact fees that range from $10,000 to as low as $25 depending on the type of business operations .
Among the businesses to be charged include airlines or air transport and inter-air services which have corresponding fee of $10,000 and $500, respectively.
On top of that, a non-refundable processing fee of $3 and a business fee of $50 are also imposed which shall be paid upon application.
The state law cited that the reason for charging impact fee for all businesses, regardless of their nature, is that they usually bring “certain added burden and cost” to the state.
According to the law, businesses would likely contribute to the increase of the cost of trash collection, road repair and maintenance, and dump site maintenance as well.
“An increase in the number of businesses operating in Airai, although bring a lot of positive things to the state, [can] also cause negative impact on the health of the people in the State due to increase in noise level, air pollution, and water pollution resulting from increase in the number of both land and water transportation and recreational vehicles,” the law stated.
It also added that increase business operations in the state will also likely to cause population to surge, hence, increasing the cost for the state’s sanitary inspection program.
“The legislature believes that the impact fee schedule set forth herein is necessary and reasonable in helping the state to defray some of the costs anticipated herein,” the law read.
Twenty-eight types of businesses were identified with a corresponding impact fee and these include scrap metal businesses charged with $500 impact fee, hotel with minimum of 50 rooms charged with $350 while those with less than 50 rooms are charged $150, propane gas and gas stations charged with $300, and wholesale businesses charged with $150, among others.
The collected fee, according to the amended state law, will be used to enforce compliance with the law, replenish supplies needed for state office operations such as printing of business licenses and citations, provide fund for rental of equipment needed for dump site maintenance, cover cost of streetlights, and support operations of the Airai Elementary School and provide for Airai State Scholarship Fund Account, and other state operations and expenses.
Any entities who will be found violating the law are subject to a fine of $5 a day if they fail to submit applications for renewal of business license on the December 31 deadline.
Meanwhile, a $500 fine per offense also awaits business operators in Airai State who will be found not possessing a business license. (Rhealyn C. Pojas)