{"id":370335,"date":"2022-06-14T06:02:04","date_gmt":"2022-06-13T20:02:04","guid":{"rendered":"https:\/\/www.saipantribune.com\/?p=370335"},"modified":"2022-06-14T06:02:04","modified_gmt":"2022-06-13T20:02:04","slug":"house-passes-bill-to-exempt-cpa-airport-revenues-from-1-opa-fee","status":"publish","type":"post","link":"https:\/\/www.saipantribune.com\/index.php\/house-passes-bill-to-exempt-cpa-airport-revenues-from-1-opa-fee\/","title":{"rendered":"House passes bill to exempt CPA airport revenues from 1% OPA fee"},"content":{"rendered":"
\"\"<\/a>
Edmund S. Villagomez and Kina B. Peter<\/figcaption><\/figure>\n

Despite the strong opposition of the Office of the Public Auditor, the House of Representatives passed yesterday with amendments a bill that would exempt the Commonwealth Ports Authority from paying the 1% OPA fee with respect to CPA\u2019s airport revenues.<\/p>\n

With 15 representatives voting \u201cyes\u201d and three voting \u201cno,\u201d House Bill 22-102, HS1 now goes to the Senate for similar passage. House Speaker Edmund S. Villagomez (Ind-Saipan) is the main author of the bill.<\/p>\n

The three who voted \u201cno\u201d were Reps. Christina E. Sablan, Leila F. Staffler, and Edwin K. Propst. All are Democrats representing Saipan. Two representatives were absent. Minority leader Angel A. Demapan (R-Saipan) voted \u201cyes\u201d but \u201cwith deep reservations.\u201d<\/p>\n

During the public portion at the start of the session, Public Auditor Kina B. Peter asked House members not be pressured into voting for a legislation that is very impactful to a CNMI regulatory agency.<\/p>\n

\u201cAgain, I ask that this legislative body allow OPA as a regulatory agency of the CNMI to function and exist without the continued threat of its funding and independence,\u201d Peter said.<\/p>\n

The public auditor said that enacting this legislation without a definitive answer from the Federal Aviation Administration whether CPA\u2019s payment of the 1% OPA fee is revenue diversion does not represent good governance.<\/p>\n

Peter said CPA has undertaken this effort to change this law when they are currently faced with at least 18 FAA non-compliance and unresolved audit findings, all of which could potentially place CPA\u2019s funding at risk.<\/p>\n

None of those, she said, represent findings that have to do with CPA\u2019s current obligations to pay OPA\u2019s 1% fee.<\/p>\n

Peter said FAA officials have appeared before the House on behalf of CPA to change CNMI laws, when the FAA has never made any affirmative finding that payment by CPA would constitute a revenue diversion.<\/p>\n

\u201cWhile they were willing to explain what sort of fee arrangement would be allowed for FAA reimbursement, they could not provide a final determination whether OPA\u2019s fixed fee is indeed a violation of FAA statute,\u201d the public auditor said.<\/p>\n

She said the five-year sunset provision in the bill is excessive as it should not take that period to obtain a final decision from FAA.<\/p>\n

Peter said five years is not equitable to other autonomous agencies and public corporations that have to absorb their share of OPA\u2019s 1% fee.<\/p>\n

Before the House passed the bill, 15 representatives voted \u201cyes\u201d and three voted \u201cno\u201d to Villagomez\u2019s floor amendment to the bill. Sablan, Staffler, and Propst voted against the floor amendment.<\/p>\n

Villagomez moved to delete the lines that state that \u201cthis exemption is subject to a sunset provision of five years from the effective date of this act or for the agency\u2019s time to obtain a clear determination from federal grantors as to whether the payment of the 1% public auditor fee from airport revenues is revenue diversion or not.\u201d<\/p>\n

The speaker also moved to delete the word \u201ctemporarily\u201d and the sunset clause in its entirety.<\/p>\n

Before voting to pass the bill, Villagomez said he attended two meetings with CPA, OPA, FAA, and two House members, and the main issue is the revenue diversion. Villagomez said it was mentioned that that OPA fee is not really a non-compliance, but that his understanding is it\u2019s because that fee has never been remitted.<\/p>\n

\u201cSo how do you say something is revenue diversion when you haven\u2019t diverted it,\u201d he pointed out.<\/p>\n

Villagomez said the airport is important to the CNMI\u2019s economy, not only for commercial reasons, but also for residents and people that travel for all kinds of reasons.<\/p>\n

Sablan thanked Demapan and Staffler for raising the question whether they could wait for some further clarification about the revenue diversion issue.<\/p>\n

\u201cI certainly have no issues with that. That would be my preference, quite honestly,\u201d Sablan said.<\/p>\n

She said OPA really wants time to get that answer from FAA, and that she knows that process has begun. Sablan said she believes there are meetings that are supposed to happen in the next couple of weeks.<\/p>\n

\u201cI have no objection to leaving this on the calendar. Maybe we could get an answer sooner rather than later,\u201d said Sablan, adding that she hopes they be able to get an answer sooner than the three years or five years that were originally proposed.<\/p>\n

She said they all share an interest in supporting both OPA as well as CPA and not undermining one in favor of the other.<\/p>\n

Sablan said OPA expressed an interest in getting clarification because if there is a revenue diversion they will not object to an exemption for the OPA for airport revenue. She said it was just the absence of that clear answer that was troubling.<\/p>\n

\u201cSo I would support keeping this on calendar and really getting a better idea of, you know, how soon we could get that final determination from FAA,\u201d Sablan said.<\/p>\n

She added that it might be worthwhile as well to enlist the support of Delegate Gregorio Kilili C. Sablan in coordinating communications with FAA headquarters.<\/p>\n

Staffler said both CPA and OPA are important for the economy, for access to the ports, both air and sea, for people. \u201cAnd so is it possible to keep this on calendar a little bit longer in order to wait for that information is my question,\u201d she said.<\/p>\n

Demapan said the intent of this legislation put them in a difficult position, like being caught \u201cbetween a rock and hard place.\u201d<\/p>\n

Demapan said he wants to believe that they all support the functions of OPA as well as the functions of CPA. \u201cI hear that there is discussion ongoing to determine whether it is revenue diversion or not. And if that is the case, was there any discussion in the House on whether or not we should wait for that determination?\u201d he said.<\/p>\n

He said he is inclined to support the bill for the sake of the economy by way of keeping the airports and seaports open, but he also does not want to backfire also, \u201cthat when this determination comes out unfavorable, we have to rush back to the table to fix it legislatively.\u201d<\/p>\n

Last Wednesday, Sablan offered to the House Ways and Means Committee that reviewed the legislation some amendments to the bill.<\/p>\n

Instead of exempting the entire CPA from paying the OPA fee, Sablan proposed a temporary exemption for CPA\u2019s airport revenue only, since CPA doesn\u2019t dispute being charged the fee for non-airport revenue.<\/p>\n

Ways and Means chair Rep. Donald M. Manglona (Ind-Rota) also moved during Wednesday\u2019s meeting to create a sunset clause and extend it from three years to five years, in what he described as \u201ca spirit of compromise.\u201d The committee approved the substitute bill.<\/p>\n","protected":false},"excerpt":{"rendered":"

Despite the strong opposition of the Office of the Public Auditor, the House of Representatives…<\/p>\n","protected":false},"author":23,"featured_media":370338,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[900],"tags":[124,65,136],"class_list":["post-370335","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","tag-cpa","tag-house","tag-opa"],"_links":{"self":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/370335","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/comments?post=370335"}],"version-history":[{"count":0,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/370335\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/media\/370338"}],"wp:attachment":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/media?parent=370335"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/categories?post=370335"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/tags?post=370335"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}