Palacios inclined to enact $15M line of credit bill

Gov. Arnold I. Palacios said Friday he is inclined to sign into law 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 provision that any loan made on this line of credit must be repaid.

Palacios said he is just waiting for the attorney general’s review and comments on the bill, and then he will be meeting with MPLT to go through it and see what their reactions are.

He said the legislation has been in the works for the past four to five months.

The governor said he, the MPLT board of trustees, Senate President Edith E. DeLeon Guerrero (D-Saipan), and House of Representatives Speaker Edmund S. Villagomez (Ind-Saipan) already had an initial meeting about the planned line of credit, the legislative process is now done, and the legislation is on his desk for action.

The governor said the bill is now being reviewed by the attorney general to ensure legal sufficiency and they will go from there.

He said he is fine with the changes or amendments made on the original bill.

Next up will be a conversation between himself and MPLT, on where they can agree on, Palacios said.

“Hopefully, everything is going to be in order. Obviously, MPLT is making sure that they…do their due diligence, but I think we’re in pretty good shape,” he said.

The governor thanked the Legislature, saying this bill is critical. “Obviously, it’s going to be harder if we don’t have the bill, but this just to make things easier and very efficient,” he added.

Last Nov. 6, the House passed the Senate’s amended version of the bill.

Villagomez is the principal author of the legislation.

The bill will allow the governor to negotiate a $15-million revolving line of credit with MPLT. Any reimbursements the CNMI Department of Finance receives from the U.S. Economic Development Administration shall be used to repay the line of credit.

Rather than pledge future interest income as security, and withhold that income to settle the line of credit, the government will use EDA funds or other resources to settle each drawdown within 30 days.

As described by Rep. Blas Jonathan T. Attao (Ind-Saipan), he said that, once the governor signs the bill into law, it will allow MPLT and the administration to negotiate the terms and conditions of this line of credit, whether it’s 5.5% in annual interest rate that is currently in the legislation, or 5.7%, and maybe even less.

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.

Gov. Arnold I. Palacios