It’s a classic example of a CNMI law signed, only to have it repealed or proposed to be repealed just a few week or months later.
The House Committee on Judiciary and Governmental Operations recommended yesterday the passage of a bill repealing Public Law 17-51 which allows NMI Retirement Fund beneficiaries to sue on behalf of the pension program if the board refuses to bring such legal action.
PL 17-51 was enacted in early September.
The JGO Committee, in recommending the passage of House Bill 17-220 in its current form, said the enactment of PL 17-51 has “detrimentally affected the Retirement Fund and its ability to fulfill its statutory mandate.”
“PL 17-51 expanded the liability risk for any person or entity dealing with the Fund to such an extent that service providers that were under contract prior to the enactment of PL 17-51 have terminated their agreements with the Fund,” the report says.
The committee, chaired by Rep. Ralph Demapan (Cov-Saipan), said with the recent loss of service providers-such as money managers-the Fund cannot afford the additional cost of doing business that resulted from the enactment of PL 17-51, and that the board of trustees cannot meet its fiduciary duty to the Fund, absent sound advice.
“However, the Committee has agreed that the enactment of this legislation should not be retroactive and therefore will not have any bearings on the current lawsuit against the Retirement Fund,” the committee report adds.
House floor leader George Camacho (Ind-Saipan), author of the repealer bill, said he hopes that his colleagues will support passage of HB 17-220.
The conference committee bill that became law cleared the House by a vote of 15-4. The only four who didn’t agree on the passage of the derivative bill were Camacho, Vice Speaker Felicidad Ogumoro (Cov-Saipan), Rep. Frank Dela Cruz (R-Saipan), and Rep. Fred Deleon Guerrero (Ind-Saipan). Rep. Edmund Villagomez (Cov-Saipan) was off-island at the time.
When asked yesterday, Villagomez said he’s still thinking whether to vote “yes” or “no” on the repealer bill.
Rep. Ray Yumul (R-Saipan) said yesterday he will vote “yes” on the repealer bill. Yumul supported the bill that became the derivative lawsuit law.
Just like Yumul, Rep. Joseph Palacios (R-Saipan) said he will also support the repealer bill, after supporting the passage of the derivative bill. Palacios said he, along with other members, were made to believe that passage of the derivative lawsuit bill was favorable to the Fund and the Fitial administration.
“I think we all learned our lessons. I am now supporting a repeal of this law. The intent is to protect the Retirement Fund,” Palacios told Saipan Tribune.
Rep. Teresita Santos (Ind-Rota) and Rep. Trenton Conner (R-Tinian) separately said they’re also looking to see what the Senate will do with its own version of a bill also repealing the derivative lawsuit act. The Senate will hold a session on Wednesday.
Sen. Juan Ayuyu (Ind-Rota), co-author of the Senate repealer bill, had said there is no reason why the derivative lawsuit law should remain when the Fund is already suing Merrill Lynch.