Senate action disappoints Peter

Kina B. Peter

Public Auditor Kina B. Peter expressed disappointment yesterday with the Senate’s passage of a House of Representatives’ bill that would exempt the Commonwealth Ports Authority from paying the 1% Office of the Public Auditor fee for airport revenues.

Peter said it’s disappointing because they tried to fully explain their position with regards to the accounting policy around it and that they were not given the opportunity to get a final determination first from the Federal Aviation Administration on the revenue diversion issue.

In the same interview, Peter said they are in contact with the Office of Insular Affairs to work through at least getting a final FAA determination on the matter.

“From my experience, we know that the federal government will typically not come in and shut down operations. Rather, they will understand the position of, at least in this case, the law,” Peter said.

She said she has not gotten the time to talk with Gov. Ralph DLG Torres on his position, but she knows that Finance Secretary David DLG Atalig opposes the legislation.

With the Senate’s unanimous passage of House Bill 22-102, HS1, HD1, during a special session last Friday, the bill now goes to the governor’s desk.

The House passed the legislation last June 13, also despite Peter’s opposition. It was only Reps. Christina E. Sablan, Leila F. Staffler, and Edwin K. Propst who voted against the passage of the bill. All are Democrats.

House Speaker Edmund S. Villagomez (Ind-Saipan) is the main author of the legislation.

All government agencies and autonomous agencies are required to allocate 1% of their annual budget to OPA. CPA only has an issue with its airport revenues being charged the 1% OPA fee; it does not object to its seaport revenues being charged the same. CPA’s explanation is that its federal grantor, the FAA, has raised the issue that this 1% fee might be considered a form of “revenue diversion.”

Considering that this 1% allocation from the different government agencies and autonomous agencies is what’s funding OPA’s operations and functions, Peter had asked the Legislature to allow OPA as a regulatory agency of the CNMI to function and exist without the continued threat to its funding and independence.

Peter said that enacting this legislation without a definitive answer from FAA whether CPA’s payment of the 1% OPA fee is “revenue diversion” does not represent good governance.

In her earlier comments on the bill, Peter stated that this legislation not only would exempt some agencies from paying 1% of their budget to OPA but would also forgive a $40-million debt owed the CNMI government.

Villagomez stated in the bill that the exemption provides financial relief to the autonomous agencies and public corporations that do not utilize the audit service of the OPA in the first place.