The Marianas Public Land Trust has approved the release of $15 million to the Torres administration, calling it a “loan” instead of a “line of credit.”
The MPLT trustees unanimously approved the loan in a meeting yesterday at their office on Capital Hill.
The 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.
The full-faith credit, which Attorney General Edward Manibusan said is considered a public debt, will be paid by withholding the interest income from MPLT, money that they remit annually to the central government’s general fund.
Finance Secretary David Atalig has also pledged the reimbursements the CNMI government will receive from the Federal Emergency Management Agency as payment for the loan.
The loan is broken down to $7.5 million that is currently available to be released by MPLT, while another $4.5 million will be drawn down in 30 to 45 days.
The remaining $5 million will be made available when the Department of Public Lands remits revenues it collects from public land leases.
DPL transferred over $3.3 million in public land lease revenues to MPLT last month. Its transfers have now reached over $15.2 million since September 2007.
Yesterday’s decision ends almost two months of back-and-forth among the MPLT trustees. They also met several times with representatives of the administration and the Legislature.
In his letter to Atalig on two questions sent to the AG’s office, Manibusan said the LOC is a public debt that will be funded by the revenues from the MPLT investment income, which is remitted annually to the CNMI government for legislative appropriation. He, however, said the LOC could not be considered operating expenses since disaster relief and recovery are extraordinary and unexpected expenses.
Atalig earlier sent two questions to Manibusan: 1. Is the line of credit from MPLT a public debt as defined by the [CNMI] Constitution? and, if so, 2. Is the purpose of the public debt to pay for disaster relief and recovery expenses considered operating expenses, which are prohibited under the Constitution?