After passing an amended electronic gaming bill, the Senate passed last night its substitute version of a $123.4-million budget bill that the House of Representatives is expected to reject, paving the way for a conference committee barely a month before the start of fiscal year 2014.
“We are ready for a conference committee with the House,” Senate President Ralph Torres (R-Saipan) told Saipan Tribune shortly after the session that lasted until about 7:30pm.
Senate Fiscal Affairs Committee chair Sen. Jovita Taimanao (Ind-Rota) echoed the president’s statement, adding that she’s ready to meet with House conferees.
The Senate’s substitute version of the House electronic gaming bill sets aside 60 percent of the fees collected annually to pay the 25-percent cut in retirees’ pension as a result of the tentatively approved NMI Retirement Fund settlement agreement.
Rota, Tinian, and Saipan also get a portion of those fees, which proved to be a “contentious” proposition in the beginning of the discussion on the revenue-generating bill.
Meanwhile, as expected, senators restored in the budget bill $2 million for the Department of Public Lands for Rota and Tinian homestead projects and $229,000 for Rota utilities, both of which were cut by the House.
Senators also increased funding for the CNMI Scholarship Program by some $200,000 but reduced the Marianas Visitors Authority funding by the same amount, among other things.
Taimanao said utilities budget was again centralized, except for the Public School System, Northern Marianas College, Commonwealth Healthcare Corp., and MVA, among other entities. The governor’s utilities budget was $7 million while the Senate version gave it $6 million-plus.
Senators gave the governor additional 75 full-time equivalent for positions that are “essential” to the delivery of public services, 25 more than what the House gave but still 25 less than what the governor had requested.
The Senate passed the budget bill by a vote of 8-0.
The budget measure, House Bill 18-98, House Draft 6, Senate Substitute 1, goes back to the House where it is likely to be rejected.
A conference committee will hash out the differences between the House and Senate versions of the bill, originally authored by House Ways and Means Committee chair Rep. Tony Sablan (Ind-Saipan).
During the session, Torres thanked the Fiscal Affairs Committee chair and members, as well as the Legislative Bureau staffers for working on the budget. Taimanao and other senators also took turns thanking each and every one who worked on the spending bill.
Electronic gaming bill
Prior to taking up the budget bill, the Senate deliberated on the electronic gaming bill first after adopting a committee report recommending its passage.
The bill amends the definition of gambling device to exclude electronic gaming machines, which will be installed only at qualified hotels.
If this revenue-generating bill becomes law, it will allow electronic table games such as poker, roulette, blackjack, craps, big wheel, slot machines, baccarat, pai gow and sic bo, and their variations.
The Senate came up with a substitute version of Rep. Tony Sablan’s House Bill 18-51, House Draft 4.
Sen. Ray Yumul (Ind-Saipan) said the major changes in the bill were the use of the license fees and the increased licensed fees.
Under the Senate version, the license fee per electronic gaming machine is $12,500 or 10 percent of net gaming proceeds. The $12,500 is also the annual license fee for each poker machine on Saipan.
This is much higher than the House version of $2,500 per machine or 10 percent of the net gaming proceeds.
Mike Ernest, associate legal counsel for Bridge Capital and a registered lobbyist in the CNMI, said each machine alone costs $20,000, so a $12,500 annual license fee, for example, would be too steep. He said electronic gaming machines are much more expensive than poker machines.
The Senate version of the bill also requires the Finance secretary to deposit in separate accounts certain percentages of annual license fees for the following: 15 percent for the Retirement Fund’s defined benefit plan members, for them to get the interest on their withdrawn contributions; 60 percent for the Retirement Fund account, to pay the 25-percent deferred retirees’ pension; 15 percent for Saipan; and the remaining 10 percent for Rota and Tinian.
Sen. Pete Reyes (Ind-Saipan) initially urged the Senate to commit 100 percent of the collected license fees to the Fund and its members. But Senate Vice President Victor Hocog (R-Rota) said the appropriations for Rota and Tinian are a “compromise.”
There is still no telling whether the Senate will also pass or reject a pending House bill legalizing casino gaming on Saipan. Casinos are legal only on Rota and Tinian.
Electronic gaming machines will only be allowed at hotels with at least 100 rooms. They could also have fewer than 100 rooms so long as the hotel is attached to a golf course.
The bill goes back to the House.