New FTZ bill version gets House nod

The House of Representatives salvaged the administration’s plan establishing free trade zones in the CNMI when it passed yesterday a measure exactly similar to the initial proposal drawn up by a government task force.

Gov. Pedro P. Tenorio earlier had rejected the legislators’ proposal after several changes were made on the plan, including use of public funds on Tinian and Rota for the proposed free trade zones, in fear they would violate constitutional provisions.

Under House Bill 12-11, amendment approved by the 11th Legislature were struck out to retain the administrative authority for those lots to the Division of Public Lands, instead of granting powers to the mayors of the two island municipalities.

This will mirror provisions of the original proposal submitted last year to the Legislature by the governor’s revitalization subcommittee on free trade zone, which provides such power to DPL solely.

Envisioned as a milestone for the Tenorio administration, the creation of these special sites, according to lawmakers, will stir economic activities on the island and offer job opportunities for local residents.

“We are cautiously optimistic that it will provide a substantial economic boost to the Commonwealth by attracting new investments, and new jobs. Jobs that will provide both training and good wages to our local residents,” said a report prepared by the House Commerce and Tourism Committee which endorsed the plan.

Based on the new proposal, the island government will grant a package of incentives, including tax breaks and lower lease rentals, to entice potential investors to the proposed free trade zones which will be set up on Saipan, Rota and Tinian.

A government agency will also be established to administer the ambitious project as well as to set our guidelines and regulations for its operations.

The administration-backed bill, sponsored by the same proponent that introduced it first in March 1999, Rep. Diego T. Benavente, now heads to the Senate for action.

Last December, the upper house inserted to the bill the provision placing large tracts of land under the control of Tinian and Rota mayors for purposes of establishing free trade zones.

But the governor, in vetoing the measure, maintained such lands do not necessarily have to be utilized for free trade zones, raising concern that it would violate constitutional provisions granting public lands’ board the rights to manage and dispose these properties.

He then urged the Legislature and the administration to work together in resolving the differences so that the plan to create special economic areas on each of the three islands would push through.

Lawmakers said they stand ready to address potential controversy that may erupt from having free trade zones in the CNMI which they believe will help augment the ailing economy.

“Through promotion of this new economic program, it will encourage new businesses, industrial and commercial activities to diversify the Commonwealth economy,” stated the committee report.

The Northern Marianas has been experiencing its worst economic slump in a decade for the last two years following the currency crisis in Asia, particularly in Japan and Korea, which has pulled down tourist arrivals and forced closure of nearly 2,000 businesses here.