Tempers flared as senators deliberated yesterday on administration-sponsored House bills increasing the hotel occupancy tax by 5 percentage points by April 1 and expediting the release of NMI Retirement Fund refunds, both of which they ended up not voting on for at least another week.
Senators, however, passed other resolutions and bills including Senate floor leader Ray Yumul’s (IR-Saipan) bill transferring the administrative functions of the Government Health and Life Insurance Program from the NMI Retirement Fund to the Department of Finance, as part of joint Senate and House efforts to help prolong the Fund’s lifespan beyond March 2014.
Initially, Sen. Jovita Taimanao (Ind-Rota) wanted Yumul’s bill to be referred to her Fiscal Affairs Committee for review
She said Senate Bill 18-11 “helps the Retirement Fund but will hurt the general fund.”
Sen. Pete Reyes (IR-Saipan) said if the Senate does not act on the bill and the Fund “falls apart,” the CNMI will be in much deeper trouble. He, however, said the government should not be in the business of competing with the private sector and proposes whether a request for proposal can be issued for a private entity to provide health and life insurance to government employees.
Members, however, decided to vote on the bill. SB 18-11 passed by a vote of 6-0, with two absences and one vacancy.
The debates were more intense and tempers flared when senators were debating a House bill increasing the hotel occupancy tax by 5 percentage points.
Taimanao asked that the bill be referred to a committee so that senators would know first the “financial impact of the bill.”
“We are supposed to be really making positive assessments as to what is the validity of the bills that we’re passing and how it would impact the people of the CNMI,” Taimanao told reporters right after the session ended.
House Bill 18-2, House Draft 1 increases the hotel occupancy tax from 10 percent to 15 percent.
It also amends three revenue-generating bills signed into law during the 17th Legislature that were never implemented because of different reasons including federal restrictions on imposing additional charges on passengers to the CNMI and hotels’ lack of authority and direction to collect additional charges from tourists or transient customers.
Taimanao said the Senate should learn from past mistakes, when they passed bills only to repeal them later on.
Reyes said he hopes there are no “personal feelings” and “personal interests” involved in delaying actions on these bills. For example, he said other senators may have been thinking about the impact on their own apartment or housing rentals because of the bill’s definition of “transient occupants.”
He said the bill does not intend to tax those individuals working and living in the CNMI but only those who are “transients” or tourists staying at hotels, motels, apartments, and other facilities.
“I’m very concerned about this because we have such a very short memory span. We were at the governor’s [office for Wednesday’s] joint meeting with the House and Senate. I honestly hope that the intent to throw a monkey wrench into this bill is not for personal reason and personal interest. We clearly defined what transient occupants are. There’s no question on what it means and further it’s in the journal, so if there’s any questions about the interpretation of what constitutes transient occupant it is clearly in the journal,” Reyes later told reporters.
He said right now, he’s “worried” because some members have apartments and house rentals that may have been a factor in not voting on the bill yesterday when senators knew about the urgency of the bill.
“I have apartments and house rentals as well but I should not let that interfere with my judgment on what is best for the Commonwealth and so I hope that is not the case here. I am not accusing anybody of any wrongdoing. But it’s always nice that when we address legislation, that we set aside personal feelings and personal interest,” he added.
After arguments back and forth, Senate President Ralph Torres (R-Saipan) referred the House bill to Sen. Frank Borja’s Committee on Resources, Economic Development and Programs.
The whole time, Marianas Visitors Authority managing director Perry Tenorio was at the session to answer questions senators may have. They allowed him to talk about the urgency of the bill, which was a “compromise” between the government and hoteliers and its overall impact on CNMI tourism.
A percentage of the hotel occupancy tax increase will be set aside for MVA to boost its promotion and marketing of the CNMI as a tourist destination. MVA has been receiving meager funds for marketing and promotion.
Tenorio said during their previous presentations to the Legislature, they talked about the positive impact of increasing the number of visitors to the CNMI if only MVA would have additional funding to promote and market the CNMI abroad.
“Our intention with this legislation is to increase the funding level for MVA so we could compete with other island destinations,” he said.
He told senators that hotels and travel partners have already prepared their brochures and rates incorporating the 5 percent hotel occupancy tax increase. From the start, MVA and the Hotel Association of the Northern Mariana Islands have supported the compromise bill.
There is no telling when the Senate will hold another session to act on the bill, weeks before the supposed implementation date of April 1.
Press secretary Angel Demapan, when asked for comment, said it’s unfortunate that the bill hit a snagged at the Senate. He said the administration hopes that senators’ concerns will be addressed soon on this key measure.