House repeals, reenacts newly passed law on $15M MPLT line of credit

A just-enacted law that authorizes a $15-million line of credit with the Marianas Public Land Trust has gotten a fresh do-over, barely two months after being enacted into law by Gov. Arnold I. Palacios last Nov. 20.

The House of Representatives passed Friday a bill that repeals and re-enacts the public law that authorizes the Commonwealth government to negotiate a revolving line of credit with the Marianas Public Land Trust in the amount of $15 million with repayment terms.

All 17 House members present during a session voted “yes” to House Bill 23-95, House Substitute 1, that Speaker Edmund S. Villagomez (Ind-Saipan) introduced. The bill was then forwarded to the Senate for action.

Last Nov. 20, Palacios signed House Bill 23-77, Senate Draft 1, into Public Law 23-12 to authorize the $15-million line of credit.

Under Villagomez’s new bill, language was added to Public Law 23-12 stating that this legislation authorizes and pledges the funds which MPLT would distribute as interest income to the general fund pursuant to Article 11, Section 6 of the Constitution as security and for repayment of the $15-million line of credit with the Commonwealth government through the Department of Finance at an annual interest rate of 5.5%.

House Bill 23-95, HS1, also states that the Legislature agrees and consents that MPLT may withhold from its annual interest income distribution to the Commonwealth for each fiscal year as security and to guarantee payment for the $15-million line of credit until that credit facility is retired and fully satisfied.

Before the voting, Rep. Blas Jonathan T. Attao (Ind-Saipan), who is one of the co-sponsors of the legislation, explained why they need to repeal and re-enact the original public law.

Attao said the administration, along with the MPLT board of trustees, reached out to the House and Senate to restore the original language that the House passed during the deliberations, which was amended by the Senate.

He said the House also voted to pass the Senate’s version of the bill with the understanding that the administration and MPLT will be addressing their differences under the contractual negotiations for the line of credit.

Attao said there are legal issues raised by the administration and MPLT, therefore the intent of this latest bill is to make sure that both the administration and the MPLT are satisfied.

“As we mentioned during the deliberation under what became Public Law 23-12, we are borrowing money from MPLT. And we want to make sure that MPLT is also satisfied with the language of the law,” he said.

Attao said he is hoping that the Senate will pass this legislation soon so that MPLT and the administration can get back to the drawing board and get this contractual agreement signed so that a lot of U.S. Economic Development Administration projects that are ongoing can proceed forward.

During the signing of Public Law 23-12, Palacios stated that the line of credit allows the administration to immediately provide seed funding to facilitate progress payments for EDA-funded projects in the CNMI, improve payment turnaround time to contractors, and expedite project completion. Palacios said that this line of credit also supports revenue generation for the CNMI through tax collections.

The governor requested this line of credit as a sort of “bridge financing or advances” for costs related to EDA projects that will help expedite the progress of about $100 million worth of CIPs.

The EDA grants have been awarded on a reimbursement basis to a number of CNMI agencies.

Under H. B. 23-95, HS1, the line of credit from MPLT will allow the CNMI government to front the funds due to vendors, such as architectural and construction firms. The CNMI government can then seek reimbursement of these funds from the EDA.

The interest rate shall be 5.5% per annum.