New FTZ bill faces risk of veto again

Legislation creating free trade zones in the Northern Marianas is again at risk of getting vetoed by Gov. Pedro P. Tenorio as lawmakers have insisted on some provisions that he has found problematic when the proposal was first enacted last year.

The House of Representatives yesterday accepted Senate amendment to HB 12-11 allowing mayors of Rota and Tinian control over public lands that can be designated as special economic sites, citing the need to expedite passage of the much-delayed measure.

But this move was precisely the main concern raised by the administration when the original bill sponsored by Rep. Diego T. Benavente was disapproved as Mr. Tenorio believed it violates constitutional provisions granting such authority solely to Board of Public Lands.

Under the Senate version, both Rota and Tinian mayors will have the discretion to designate public lands for development at rates that may be attractive to investors but below the fair market value.

In a report justifying its decision to go against the wishes of the governor, the House Committee on Commerce and Tourism said such action is “simply an act of legislative prerogative, reflecting matters of policy.”

In fact, fundamental principles set forth in section 5, Article 11 of the Constitution have lapsed since the former Marianas Public Lands Corporation ceased operations and its functions transferred to the executive branch, according to the report.

“If the House does in fact follow the Senate and pass this measure again, and then must override a veto by the governor, then the stage will be set to finally resolve this matter,” the committee said, referring to possible ruling by the Supreme Court.

Rep. Heinz S. Hofschneider, however, argued during yesterday’s session that the amendment is tantamount to duplicating functions of BPL, creating a three-tier authority in reaching a decision on the free trade zone plan.

“What we are doing here is piecemeal [decision] for every piece of public lands,” he told colleagues. “This will again be probably an exercise in futility.”

HB 12-11, which first cleared the lower house last March, eventually was passed 13-2 in favor of inserting the Senate provisions. Only Mr. Hofschneider and Rep. Stanley T. Torres voted against it.
A key economic measure, the free trade zone proposal House has been in the agenda of the Tenorio administration since 1998 as part of its efforts to boost the economy and attract investments in other industries into the island.

It seeks the creation of these special economic sites on Saipan, Tinian and Rota by granting tax breaks and other incentives to potential investors which will in turn shore up dwindling revenues in the Commonwealth, according to lawmakers.

Last March, the House salvaged the proposal after agreeing with the administration to pass the same bill approved in early 1999 and did not include the Senate amendment.

A product of months of deliberation by the governor’s Subcommittee on Free Trade Zone, the plan is envisioned as a centerpiece of the Tenorio administration following decline in the tourism industry since 1997.