‘No need for CUC-CDA write-off bill’

A member of the House minority bloc said that signing the write-off bill for the Commonwealth Utilities Corp. and the Commonwealth Development Authority is unnecessary as the debt issue had been settled by the 13th Legislature.

Veteran congressman Jesus Attao, who had voted against the write-off bill last week, said the Legislature had passed two bills specifically addressing the issues facing the two agencies.

These bills became Public Laws 13-35 and 13-36, which requires the CDA to waive $16 million of the principal debt and certain interest payments as well as the CUC’s issuance of $45 million worth of shares of cumulative, non-convertible, and non-transferable preferred stock to CDA, respectively.

The stocks issuance would also provide for the repayment of debt for the electrical consumption of the government.

“We had looked at this issue, reviewed it, and come up with two laws. I don’t think a new bill that seeks to address the same issue is needed,” said Attao in reference to House Bill 14-285, which was defeated last week.

The new bill, authored by former CUC executive director and current Vice Speaker Timothy Villagomez, said that CUC should not be compelled to pay CDA since the $45 million is part of a direct federal assistance to the CNMI, which requires no repayment.

Villagomez said that CDA merely acted as conduit for the distribution of these funds for infrastructure development in the CNMI.

Further, he argued that CDA had distributed the funds to various government agencies besides CUC, without requiring these agencies to pay back the funds given.

He also said that it is in the best interest of the CNMI to write off in full CUC loans from CDA in order to promote the stability of the utility firm, especially now when it faces a financial crisis.

Attao said, though, that CUC can be helped without passing a new law. “Without HB 14-285, we can help CUC. In fact, we already passed the necessary laws to help the agency.”

He also said that if the bill is a serious matter for both CUC and CDA, both agencies would have been lobbying for its passage. As it turned out, he said, only CUC officials appeared at the House chamber to support the measure.

“Why was CDA missing?” he asked.

Attao also echoed the opinion of House minority leader Arnold I. Palacios that there was a lack of substantive information for the House to make an educated decision on the bill.

Villagomez earlier said the bill was needed since both CDA and CUC have tried but failed to resolve their dispute a number of times.

Following a court order advising the two agencies to settle their differences among themselves, CUC and CDA executed an amended memorandum of agreement in 2002, and later in January 2004, setting forth the terms of their agreement.

But Villagomez said that since CUC “is in state of severe financial crisis” it is unable to make payments pursuant to the agreement.