House of Representatives Speaker Edmund S. Villagomez (Ind-Saipan) has introduced a bill that seeks to authorize a revolving line of credit between the CNMI government and the Marianas Public Land Trust in the amount of $15 million.

Villagomez’s House Bill 23-77 authorizes and pledges the funds which MPLT would distribute as interest income to the general fund pursuant to Article 11, Section 6 of the CNMI Constitution as security and for repayment of the $15-million line of credit with the government through the Department of Finance at an annual rate of 5.5%.

Under the legislation, the line of credit and this legislative authorization expire automatically at the end of the 84-month period and shall not be renewed nor extended.

The bill 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 to guarantee payment for the $15-million line of credit until that credit is retired and fully satisfied.

Among the terms and conditions is that the Office of the Governor and Department of Finance shall repay the line of credit as to any drawdowns no later than 30 calendar days from the date of each drawdown.

Any reimbursements received by the Department of Finance/Office of the Governor from the United States Economic Development Administration paid or remitted to the CNMI government for Capital Improvement Projects advances which are covered in the MPLT-CNMI Revolving Line of Credit shall be paid directly to MPLT as settlement for the line of credit.

Because the Revolving Line of Credit is a public debt, this legislation must be passed by two-thirds of the members of the House and Senate before being signed into law.

The Attorney General shall review the Revolving Line of Credit Agreement for legal sufficiency for the governor and Finance secretary to enter into this transaction.

Last July 17, Gov. Arnold I. Palacios, in a letter signed by Senate President Edith E. DeLeon Guerrero (D-Saipan) and House Speaker Villagomez, submitted a written request, to MPLT.

In that letter, Palacios requested a line of credit in the amount of $20 million for “bridge” financing or advances” for costs related to federally funded CIP from the U.S. Economic Development Administration whereby the CNMI would be reimbursed for such advances within 30 days of advancing such costs for grant projects.

Palacios also requested that MPLT reduce the interest rate on the CNMI’s existing debt obligation to MPLT for the Typhoon Yutu loan, currently at 7.5% per annum.

That debt currently stands at approximately $10.7 million as of June 2023 and is being repaid by MPLT’s withholding of the annual interest-income distributions to the general fund.

Villagomez stated in the legislation that MPLT has reviewed initial planned drawdown requests by Palacios and has determined that a $15 million line of credit is suitable for the amounts needed, in any given 45-day period, during the next few years of forecasted drawdowns offered by the governor.

Speaker Edmund S. Villagomez