House rejects Senate amendments to bill on Fund contribution withdrawal

The House of Representatives rejected yesterday the Senate’s amendments to a House bill originally allowing non-retired members of the NMI Retirement Fund to withdraw their contributions from the pension agency without being required to resign from their job or being penalized, giving way to a conference committee composed of certain House and Senate members who will try to draft a compromise version of the bill.

A motion to reject the Senate amendments to Speaker Eli Cabrera’s (R-Saipan) House Bill 17-226 drew 14 “yes” votes and four “no” votes.

Two other members present did not vote. They were Reps. Tony Sablan (R-Saipan) and Ralph Demapan (Cov-Saipan). Demapan did not vote on the original bill.

The bill that was rejected was HB 17-226 House Draft 1, Senate Substitute 1, Senate Draft 2.

The only four who essentially supported the Senate amendments were Reps. Frank Dela Cruz (R-Saipan), Ray Tebuteb (R-Saipan), Janet Maratita (Ind-Saipan), and House minority leader Joseph Deleon Guerrero (R-Saipan).

The House also passed yesterday a Senate bill repealing a four-month-old law allowing Fund beneficiaries to sue on behalf of the pension program if the board refuses to bring such legal action. (See separate story)

Senators made several amendments to HB 17-226, including allowing non-retired members to “roll over” their Fund contributions to the Defined Contribution Plan, to help prolong the government pension agency’s lifespan.

The Senate amendments also include a “hardship loan” provision so that members could borrow up to 50 percent of their contributions to the Fund.

Senators also included in the bill a revenue-generating provision or a funding mechanism wherein tax rebates will be cut. But some House members raised concern on the unconstitutionality of this amendment because any revenue-generating measure should originate from the House, not the Senate.

Sixto Igisomar, chair of the NMI Retirement Fund board of trustees, said yesterday he does not want to comment on the House’s action on the Senate-amended bill at this time. But he said the Fund would welcome any opportunity to be asked for comments on the bill during the conference committee meetings and review. Igisomar was at the House session yesterday.

House Floor Leader George Camacho (Ind-Saipan) said the bill will now be reviewed by a joint committee from the House and Senate.

“The Senate made lengthy amendments to that. The bill is now almost night and day. Not that I’m against the Senate version in its entirety but it’s very lengthy. We need to discuss that because they added so many different sections to it. We have to analyze each and every one (of the added sections),” he said.

While he has yet to fully review the Senate amendments, he said he is particularly concerned about the new section on tax rebate cuts not only because it’s a revenue-generating provision but also because it may only cover Fund members and not the general public.

Tebuteb, for his part, said he supported the Senate amendments to the House bill, so he voted “no” to the motion to reject the Senate amendments.

Dela Cruz said he would have voted “yes” if the motion was to pass the bill as amended by the Senate.

“The Senate amendment had provision for funding mechanism,” he told Saipan Tribune.

A portion or 12.5 percent of all the amounts paid to the government with respect to rebate taxes will not be placed into the general fund or commingled with other funds, under the Senate amendment.

That amount will be placed in a Retirement Refund Special Rebate Account, which will be used to pay government employees’ retirement contribution refund or rollover without further appropriation.

Senators would have wanted the reduction in the rebate offset amount to take effect on Jan. 1, 2012.

Senate President Paul Manglona (Ind-Rota), when asked for comment, said he’s likely to appoint to the conference committee the same members he appointed to a Special Committee on Retirement Fund Issues headed by Sen. Jovita Taimanao (Ind-Rota).

Senate Vice President Jude Hofschneider (R-Tinian) views a conference committee as an appropriate venue to “hash out the differences between the two versions” of the bill and come up with a bill that’s agreeable to the Senate and House conferees.

The Senate and the House each formed a special committee to review bills affecting the Retirement Fund, including HB 17-226.