Rep. Lizama: Keep moratorium but allow transfer of business license

A congressman has introduced a bill allowing the transfer of business licenses within the garment industry “to stimulate economic growth” amid the ongoing downsizing in the sector.

In House Bill 14-323, Rep. Jesus SN. Lizama, chairman of the House Committee on Judiciary and Governmental Operations, said there is a need “to relax” the prohibition on the transfer of business licenses given the “the current period of adjustment within the garment industry.”

Lizama said his bill calls for “strict criteria and conditions” to be set by the Department of Finance and the Attorney General’s Office.

He said the bill would keep the current cap on garment workers at 15,727.

“The relaxation would not result in the violation of the moratorium on the number of qualified garment manufacturers. The Legislature recognizes the need to maintain compliance with the ceiling,” said Lizama.

The bill provides that Finance may transfer a business license to a new garment manufacturing company if the license is revoked, not renewed, lapsed, or if the owner has ceased operations.

The amendment, the bill said, shall not apply to licenses of garment manufacturers that ceased operations prior to January 1, 2005 when the World Trade Organization’s lifting of trade quotas took effect.

In the CNMI, two garment manufacturers have closed down and many others have downsized their operations since January.

Earlier, House majority floor leader Oscar M. Babauta introduced House Bill 14-42, which aims to allow “a reallocation” of garment workers in case of company closures.

It means that the slots remain with the original employer, thus giving the company a chance to hire new personnel in due time.

Another garment-related bill, House Bill 14-315, is pending at the House of Representatives, which aims to reduce the existing 3.7 percent garment user fee to 2.7 percent to help the local apparel industry compete globally amid the worldwide lifting of trade quotas.

The bill, authored by Babauta, said the reduced user fee is necessary in view of the ongoing downsizing and closures of factories.

He said the 1-percent reduction would serve as “incentive” so that the Commonwealth garment industry “can remain viable and contribute to the Commonwealth’s efforts for economic revitalization.”