Revenue-generating bill now heads to Fitial

The House of Representatives gave the final legislative approval to an omnibus bill that would help the Commonwealth Utilities Corp. to pay for fuel.

The bill passed 16-2, with Reps. Tina Sablan and Edward Salas voting no. Rep. Stanley T. Torres abstained, and Rep. Ray N. Yumul was absent.

The measure now heads to the Governor’s Office for signature. Gov. Benigno R. Fitial is expected to sign the bill, which a top administration official has said the government “needs desperately.”

The measure would suspend the power rates rollback up to Dec. 31, 2008, and allow the Public Utilities Commission to issue emergency and interim power rates. It would ease quorum requirements for PUC, allowing the regulatory board to set rates even if there is only one commissioner.

The proposed law also incorporates fiscal measures such as the reduction of the government’s pension contribution rate from 18 percent to 11 percent of the total payroll. Half of the savings—about $5.63 million—from the reduction would go to CUC’s fuel expenses. Some $80,000 would go to PUC’s startup operations. The rest—approximately $5.55 million—would be used at the governor’s discretion.

Further, the bill would grant the governor unlimited reprogramming power over lapsed funding, re-appropriate some $2.15 million of suspended earmarks to CUC’s fuel expenses, and allow CUC to use half of its customers’ security deposits for fuel.

The bill also contains provisions that would apply gross business tax on banks, and double the fees and charges for services such as driver license, vehicle registration, firearms license, police report, and marriage license.

The bill is a product of talks among the members of the Senate Fiscal Affairs Committee and the House Ways and Means Committee, administration officials, and the PUC chairwoman.

Sablan, a co-sponsor of the original bill that called only for the reversal of the power rates rollback, strongly opposed the omnibus legislation. She said the bill was, “at its core, an act of fear and poor planning.”

“While I fully realize the dire situation into which CUC has fallen, we solve neither our immediate nor our long term problems to raise taxes without cutting costs, or to borrow from the Retirement Fund which is teetering on the brink of insolvency because of this government’s continuing failure to pay what it owes,” she said.

Sablan added that there was insufficient data on how the legislation would impact the Retirement Fund, the projects to be affected by the reprogramming, and the banks that would have to pay higher taxes.

She took issue with a provision granting seed money to PUC while it remains unknown what became of the funds left by the commission’s predecessor, the defunct Commonwealth Telecommunications Commission.

Further, she raised objection to the PUC quorum provision. “Why, then, even have a PUC? Is it really that much worse to have an unregulated utility, than to have one or two PUC czars calling the shots under the guise of oversight?” she asked.

Speaker Arnold I. Palacios said he is also concerned about some of the provisions, but the urgency of CUC’s fiscal problems trumps any objections he has about the bill.

“When a vessel carrying fuel comes over and CUC is penniless, we have to do something. This bill is not fear-driven, it deals with reality,” Palacios said.

Rep. Heinz Hofschneider echoed Palacios’ statement. He said the bill is “a tourniquet approach,” but the urgency of the situation calls for a compromise.