House OKs bill to promote economic development

The House of Representatives unanimously passed last week a bill that seeks to promote economic development in the CNMI and increase the Commonwealth competitiveness for private sector investment.

House Bill 22-70, also known as the Investment Incentive Act of 2021, now goes to the Senate for action.

Rep. Angel A. Demapan (R-Saipan), who is the author of the bill, said the bill updates the CNMI’s Qualifying Certificate Program to ensure that the CNMI’s economy thrives for generations to come.

“There will also be opportunities for existing businesses to avail for these incentives for eligible expansion projects, finally leveling the playing field for many of our longstanding locally owned businesses,” he said.

The lawmaker said these businesses have been here for decades, in good times and in bad, so it’s only fair that they be allowed to avail of incentives to further expand their business activities.

Demapan thanked the House Committee on Commerce and Tourism chaired by Rep. Denita Yangetmai (D-Saipan) for recommending passage of the legislation.

He also extended his gratitude to the Governor’s Council of Economic Advisers and the Commonwealth Economic Development Authority for the opportunity to work together in moving this legislation through the House.

Under the bill, CEDA is required produce a “targeted industry” listing, determining the industries eligible to apply for a Qualifying Certificate in line with the five-year economic development goals of the Commonwealth.

CEDA shall revisit the Targeted Industry listing at least once per calendar year and, if necessary, update it.

Any business which is either a trust, a partnership, a sole proprietorship, a corporation, a limited liability corporation or a limited liability partnership is eligible to apply for one or more of the areas listed in the Targeted Industry list.

Three new subsections are also added to read that CEDA, in including industries for eligibility within the Targeted Industry listing, shall categorize industries using the North American Industry Classification System codes associated with the industry.

The CEDA board of directors shall establish “Economic Development Zones” throughout the Commonwealth and may allow for industries to be targeted for one or more of these zones.

For the purposes of defining Economic Development Zones, Tinian and Rota will be separately categorized as their own respective zones.

Upon publication of the Targeted Industry list, CEDA shall meet with the governor, Finance secretary, the director of the Division of Revenue and Taxation, and if applicable the secretary of the Department of Public Lands, to establish the terms and conditions for tax rebates or abatements for the listed targeted industries.

These terms and conditions will serve as the boundaries for which CEDA may negotiate with applicants on the terms of benefits offered for a particular investment.

An added new section reads that in coordination with the Office of the Governor, applicable departments and agencies and the Governor’s Council of Economic Advisers, CEDA shall be the lead entity in formulating and implementing the CNMI Strategic Investment Program to target specific developments that will provide benefits to the development of the CNMI’s economy and advance the economic opportunities within the Commonwealth.

The Strategic Investment Program shall identify necessary developments that do not exist in the CNMI and establish a plan for the development of such an investment in line with the economic development goals of the Commonwealth.

For developments located on public lands, DPL shall retain ownership of the property, and, in coordination with CEDA, issue a request for proposals for the lease of that land in accordance with DPL associated laws and regulations.