Senate overrides Teno’s veto on FTZ bill

In what appears to be a desperate attempt to hasten the setting up of free trade zones in the Northern Marianas, the CNMI Senate has overturned Gov. Pedro P. Tenorio’s refusal to sign House Bill 11-389 into public law.

Aside from overriding the governor’s veto on the free trade zone bill, the Senate also nullified Mr. Tenorio’s rejection of six other bills, including the Tax Abatement Act and the Managaha Marine Conservation Act.

The Senate’s action was in contempt of the CNMI chief executive’s concern that House Bill 11-389 failed to address issues surrounding the delegation of authority to decide on the use of public lands.

In explaining his rejection of the proposed measure, the governor mentioned changes made by the 11th Legislature to the original draft, including a provision which places control of large tracts of land under the control of Tinian and Rota mayors.

The bill allows Tinian and Rota mayors to put the land to municipal uses or be leased for commercial purposes without any meaningful restrictions or limitations.

This mandate raises concern as it appears to contradict the principle policy under our Constitution which places certain fiduciary responsibility to the Board of Public Lands in the management and disposition of all public lands, Mr. Tenorio said.

The CNMI chief executive has called for a joint effort between the Administration and the Legislature in addressing the issues that restrain the approval of the free trade zone bill which is part of the government’s plans in diversifying the local economy.

The CNMI government started coining the idea of establishing free trade zones in the islands when the local tourism industry suffered strong blows from the Asian financial crisis in middle of 1997.

A study prepared for the 11th Legislature suggested that the Commonwealth come up with an overall incentive package, including tax holidays, that may be given to businesses that would relocated to the proposed trade zone.

The government should be willing to sacrifice some short-term revenue in the interest of long-term growth, given the strong competition to attract investment. Tax holidays would allow an FTZ to offer significant financial incentives to investors.

Also, establishment of a Free Trade Zone Development Corporation would help facilitate business relocation to the FTZ which may be ideally erected in a tract of land lying adjacent to the southern side of the Saipan International Airport.

The entity may also be tasked with setting appropriate strategies and goals for the trade zones, like what types of investments to solicit and what the goals for growth are.