Washington supports increase in local matching waiver but…

Interior Deputy Assistant Secretary David Cohen has expressed the Bush administration’s support for increasing the waiver requirement on local matching funds for certain federal grants to the insular areas—including the CNMI—but added that the waiver should not be mandatory for discretionary grants coming from other federal agencies.

CNMI Washington Rep. Pete A. Tenorio earlier expressed concern that the passage of House Resolution 1189 might result in reduced funding in some federal programs for the CNMI. The federal bill is now at the Senate after being passed by the U.S. House of Representatives.

U.S. House Rep. Eni F.H. Faleomavaega of American Samoa introduced the bill, which was co-sponsored by Reps. Madeleine Z. Bordallo of Guam and Donna Christensen of the Virgin Islands.

Cohen testified before the U.S. Senate’s Committee on Energy and Natural Resources in connection with the legislative measure, which seeks to increase the waiver requirement from $200,000 to $500,000 on local matching funds for grants to the CNMI, Guam, the Virgin Islands, and American Samoa.

The bill seeks to waive matching requirement on grants of $500,000 or less, including in-kind contributions, from federal agencies, including the Interior, Education, Justice and Health and Human Services Departments. For grants requiring local matching funds of $500,000 or more, the measure seeks to waive $500,000 of the matching requirement.

Cohen said the mandatory waiver should only apply to “formula” grants, which he said are “tailored for use by states with conditions and limitations imposed with the states in mind.” He said grants from the Interior’s Office of Insular Affairs aptly fall under the formula grant category.

“Territories are often included as an afterthought. Even the smallest and poorest state has many more resources at its disposal for dealing with grants than do the territories,” Cohen said. “The waiver, therefore, makes sense for formula grants.”

There are grants that should not entail mandatory local matching waiver, according to Cohen.

He said grant-giving agencies should be given the flexibility to decide on whether or not to waive matching fund requirements for discretionary grants.

“The matching requirement helps to ensure that the grant objective is a priority for the territory seeking the grant,” Cohen said.