With the Marianas Public Land Trust agreeing to lend $15 million to the Torres administration, House Speaker Blas Jonathan Attao (R-Saipan) will be amending the bill related to the matter that he previously introduced to refer to the amount as a “loan” instead of a “line of credit.”
In an interview Tuesday, Attao said they are preparing to substitute the language in his House Bill 21-44 to change the term “line of credit” to reflect what the MPLT is more comfortable with.
Attao said the substitute language will be discussed during the House session next week.
The MPLT trustees established that they would use the term “loan” instead of “line of credit” and set the interest rate at 7.5 percent, to be paid in five years.
Attorney General Edward Manibusan has issued an opinion that the amount is considered a public debt and will be paid by withholding the interest income from MPLT, money that they remit annually to the central government’s general fund.
Attao said the original language in his legislation is “line of credit,” but MPLT decided in the course of their deliberations in the last couple of weeks that it’s better to just make it a straight-up loan, with an interest rate.
“We’re going to go [with]…what is more comfortable for MPLT because, at the end of the day, they are the lending institution,” he said.
Attao said the legislation itself is only the application process to allow this $15million loan to happen.
He said he is actually more comfortable with the line of credit “but MPLT said, ‘No, we want to give a straight loan and straight up withhold the interest.’”
Attao said the MPLT trustees’ fiduciary responsibility is for investment purposes and they don’t have immunity from being sued for these actions. “They can get sued for these actions. And they are comfortable with this language, to make it a loan and also to withhold the interest,” he added.
Attao also introduced last week House Bill 21-63, which would allow the Commonwealth Development Authority to float a special revenue bond to be used to refund general obligation bonds.
Attao noted that the people of the CNMI have already ratified House Legislative Initiative 17-5, which allows the CNMI government to float a general bond.
His legislation, he said, will allow other bond opportunities and not just the general bond.
With the amendment, Attao said it will allow CDA to consider other bond opportunities—ones that are taxable and beneficial to the CNMI government.
“This amendment is more about allowing [CDA] to [consider] other options” that are more beneficial to the CNMI, he said.
“With our credit rating now, we have the opportunity to be able to go into different types of bonds. But we need to amend the current statute so that they can open up to other types of bond,” he added.
Attao believes that the MPLT loan and the amendment to the bond may get the CNMI out of austerity for the rest of fiscal year 2019.