‘Cut rebate tax, use federalization law money for training programs’

House minority leader Joseph Deleon Guerrero (R-Saipan) and Rep. Ray Yumul (R-Saipan) separately seek to cut rebate tax to help save the NMI Retirement Fund and allocate some $3.3 million that could be collected from employers paying the $150 “CNMI education fee” for each employee they want to hire, respectively.

Deleon Guerrero’s House Bill 17-217 seeks to reduce the rebate tax effective Jan. 1, 2012 and be in effect for two years, and deposit the difference into a separate account to help the NMI Retirement Fund.

The bill, co-sponsored by five other House members, seeks to reduce the rebate offset amount from 90 percent to 70 percent if the rebate base is not over $20,000.

The bill proposes to cut the rebate amount from $18,000 to $14,000, plus 50 percent instead of 70 percent of the rebate base over $20,000 but not more than $100,000.

For a rebate base of over $100,000, the rebate offset amount will be reduced from $74,000 to $54,000, plus 30 percent-instead of 50 percent-of the rebate base.

HB 17-217 says at least 12.5 percent of all amounts paid to the government with respect to taxes imposed under this chapter shall not be placed into the general fund or commingled with other funds.

The funds should be deposited by the Finance secretary into one or more FDIC or FSLIC insured special purpose trust accounts in banks within the CNMI.

Yumul’s HB 17-218, meanwhile, seeks to allocate funds received pursuant to U.S. Public Law 110-229, which placed CNMI immigration under federal control.

PL 110-229 mandates employers to pay a “CNMI education funding fee” of $150 per foreign worker they petition for a Commonwealth-only worker status per year. This fee cannot be waived.

Yumul said with a numerical cap of 22,416 CW visas for fiscal year 2012 alone, the CNMI could collect a total of $3,362,400 that should only be used to fund educational training and help eligible persons in the CNMI seek jobs.

Under Yumul’s bill, 30 percent of the funds collected will go to the Public School System’s Technical Education Program Fund; 50 percent for the Northern Marianas College’s vocational education programs; and 20 percent for the Office of the Governor’s distribution to other government and private sector vocational education and job training programs.

In an interview, Yumul said allocating these money to educational programs will help the CNMI Legislature in passing a budget for FY 2012.

He said instead of zeroing out the leadership allocation and lawmakers’ individual allocation to give the difference to NMC and PSS, the Legislature can instead appropriate money from the CNMI education funding fee.

The Senate is expected to pass today an amended version of the House-passed budget bill for FY 2012.

Senate President Paul Manglona (Ind-Rota) said the budget bill will still reflect a zero account for both the leadership and individual members’ allocations, and may use the CNMI education funding fee as “other sources” of funding just like Compact-Impact.