$15M MPLT line of credit bill goes to Palacios

The House of Representatives passed yesterday the Senate’s amended version of a bill that authorizes the CNMI government to negotiate a revolving line of credit with the Marianas Public Land Trust in the amount of $15 million, with the proviso that any loan made on this line of credit must be repaid or retired within no more than seven years.

With 19 House members present at a session voting “yes,” House Bill 23-77, in the form of Senate Draft 1, now goes to the governor’s desk for action. Rep. Ralph N. Yumul (Ind-Saipan) was present at the earlier part of the session, but was not around during the voting.

House Speaker Edmund S. Villagomez (Ind-Saipan) is the principal author of the legislation.

Before voting, Rep. Patrick H. San Nicolas (R-Tinian) and Rep. Blas Jonathan T. Attao (Ind-Saipan) explained why they support the legislation.

San Nicolas said the bill will allow Gov. Arnold I. Palacios to enter into a $15-million revolving line of credit with MPLT. According to the bill, any reimbursement received by the administration or the Department of Finance from the U.S. Economic Development Administration shall be applied toward the line of credit.

Moreover, San Nicolas said, rather than pledge future interest income as security and withhold income to settle the line of credit, the CNMI will use EDA funds or other resources to settle each drawdown within 30 days.

The Tinian lawmaker believes this approach is prudent and appropriate and would be consistent with the proposed provisions of Senate Legislative Initiative 23-1, which is a constitutional amendment that would require MPLT to deposit the interest of public land funds to an account restricted to persons of Northern Marianas descent.

San Nicolas, however, noted that the projects slated to be funded by this public debt authorization are projects on Saipan.

“Inasmuch as I support any and all funds for Saipan projects, I would be remiss if I did not ask the administration to consider Tinian and Rota capital improvement projects as he moves forward with his capital improvement project plans,” he said.

Attao said it’s unfortunate that they had to get to this point in introducing legislation to allow a line of credit with MPLT. In the beginning stages of these grants, Attao said, EDA actually paid the monies upfront so the CNMI didn’t have to worry about an upfront payment from the CNMI coffers.

Unfortunately, he said, the rules have changed and it’s grant base so they have to make sure that they have to make the CNMI abide by federal rules and regulations.

In addition, Attao said, these grants are set to expire within the next three to four years so that’s why they need these monies to get these projects rolling.

He said these projects are not only for Saipan, but for CNMI projects.

“When it doesn’t expire, we have a seven-year time limit. So if there’s any potential projects for EDA to approve for the first and second senatorial districts, this line of credit can also be utilized within this period,” Attao added.

Once the governor signs the bill into law, it will allow both parties—MPLT and the administration—to negotiate the terms and conditions of this line of credit, whether it’s 5% that is currently in the legislation or 5.7%, and maybe even lesser, he said.

During the public comments portion of the session, private citizen Richard Hofschneider expressed opposition to the bill’s passage. He urged House members to defer voting on the measure and instead speak with Delegate Gregorio Kilili C. Sablan (D-MP) because, according to him, if he is not mistaken, the CNMI has 30 days to access $97 million in grants from the U.S. Department of Commerce.

“For me, please do not touch that over $100-some million investment from Taotao Tano as it does belong to the Chamorro people,” he said.

Palacios requested this line of credit as a sort of “bridge financing or advances” for costs related to over $60-million EDA-funded capital improvement projects that the CNMI will receive.

One of the EDA grants is funding the ongoing Paseo de Marianas rehabilitation project in Garapan.