Saipan, Commonwealth of the Northern Mariana Islands (CNMI) — A recently enacted law, allowing for a $15 million line of credit with the Marianas Public Land Trust (MPLT), has undergone a revision, just two months after its initial enactment by Gov. Arnold I. Palacios on Nov. 20.
On Friday, the House of Representatives passed House Bill 23-95, House Substitute 1, a measure introduced by Speaker Edmund S. Villagomez (Ind-Saipan). The bill repeals and re-enacts the public law authorizing the CNMI government to negotiate a revolving line of credit with MPLT, amounting to $15 million with specified repayment terms.
All 17 House members present during the session voted affirmatively, and the bill has now been forwarded to the Senate for further consideration.
The revision, House Bill 23-95, HS1, introduces new language to the existing law, Public Law 23-12, stating that the legislation authorizes and pledges funds distributed by MPLT as interest income to the general fund, pursuant to Article 11, Section 6 of the Constitution. These funds are earmarked as security and repayment for the $15 million line of credit, managed by the Commonwealth government through the Department of Finance, with an annual interest rate of 5.5%.
The bill also expresses the Legislature’s agreement and consent to allow MPLT to withhold a portion of its annual interest income distribution to the Commonwealth. This withholding serves as security and a guarantee for the repayment of the $15 million line of credit until the credit facility is retired and fully satisfied.
Rep. Blas Jonathan T. Attao (Ind-Saipan), one of the co-sponsors of the legislation, explained the need for repealing and re-enacting the original public law. Attao highlighted the collaboration between the administration, MPLT board of trustees, and the legislature to address differences arising from the contractual negotiations for the line of credit.
The revisions aim to ensure satisfaction on both sides, addressing legal concerns raised by the administration and MPLT. Attao emphasized the importance of MPLT’s contentment with the language of the law, especially considering the borrowing relationship between the CNMI government and MPLT.
The hope is that the Senate will promptly pass the legislation, allowing MPLT and the administration to finalize the contractual agreement. This step is crucial for the progression of various U.S. Economic Development Administration projects currently underway in the CNMI.
During the signing of Public Law 23-12, Governor Palacios highlighted the significance of the line of credit in providing seed funding for EDA-funded projects, improving payment turnaround time to contractors, and supporting revenue generation for the CNMI through tax collections. The line of credit serves as bridge financing for costs related to EDA projects, expediting progress on approximately $100 million worth of Capital Improvement Projects (CIPs).
Under House Bill 23-95, HS1, the line of credit from MPLT allows the CNMI government to advance funds to vendors, such as architectural and construction firms, with the ability to seek reimbursement from the EDA. The specified interest rate for the line of credit is set at 5.5% per annum.