U.S. District Court for the NMI designated Judge David O. Carter is encouraging the Commonwealth Utilities Corp.’s project management company and the CNMI Department of Finance to resolve on their own an issue whether or not CUC projects being handled by Gilbane Federal are subject to the CNMI gross receipts tax.
In an order last Friday, Carter said the invoices of Gilbane Federal, as CUC’s engineering and environmental management company, include line items for the GRT totaling $10,424.
It is the CNMI Division of Revenue and Taxation’s position that GRT may be applicable to EEMC projects.
Bradley R. O’Brien, the senior trial attorney of the U.S. Department of Justice Environmental Enforcement Section, informed Carter about this potential issue last week in the U.S. government’s request for the court to direct payment to the EEMC for several projects.
Carter said O’Brien notified him that talks are ongoing whether the GRT applies to EEMC projects and, if so, the appropriate payment mechanism for the GRT.
For these reasons, the judge said, the combined $10,424 GRT line items were deducted from the U.S. government’s payment request.
Consistent with the U.S. government’s request, Carter said he is not authorizing GRT payments at this time, although he reserves the future right to do so.
The EEMC’s invoices include personnel time and hourly charges incurred relating to the GRT issue.
Carter said the U.S. request for payment describes these GRT charges as not significant and asked the court to approve the invoiced amount, subject to a potential future credit for these payments.
Carter said consistent with the U.S. government’s request, he is authorizing payment for personnel time and hourly charges associated with the GRT issue, although he reserves the right to seek future credit for these payments from the EEMC.
Last February, Carter granted the request of the U.S. and the CNMI governments and CUC to extend for one year, or up to February 2021, Gilbane Federal’s term as the EEMC that is tasked with overseeing stalled CUC projects.
As EEMC, Gilbane Federal has the power to rapidly complete some stalled CUC projects or help CUC comply with court-mandated projects.
Early this year, Gilbane Federal disclosed that it has now completed seven task orders and made over $2 million in savings for CUC.