‘MRC settlement bill void’

The Marine Revitalization Corp. settlement bill that the Legislature passed Friday is actually void, according to Senate legal counsel Michael Ernest yesterday.

In an interview, Ernest said that House Bill 14-270, which came under lengthy deliberation in both houses, is invalid because the legislative approval did not happen within four months after the 2003 settlement agreement was signed—as was earlier agreed upon.

The bill approves the settlement between the government and MRC and Anthony Pellegrino. It also allocates $800,000 as initial payment to MRC.

In effect, Ernest said the legislative action does not mean actual appropriation of payment to MRC. He said the passage only meant the Legislature is open to approving a settlement.

“It [settlement bill] is void. The Legislature has shown its willingness to approve a settlement but it has not shown its willingness to appropriate [an award],” Ernest said.

He noted that under the terms and conditions of the agreement, the settlement needed to secure legislative approval within four months. The agreement was signed on Feb. 11, 2003.

“If it’s not done in four months, it’s done,” he said.

Right now, he said, the parties—government and MRC—have the option to ask the arbitration panel to withhold any decision pending a possible negotiation for a new settlement accord.

Arbitration on the case resumed on Nov. 30 and reportedly ended on Dec. 1.

“I think they’re just waiting for the decision now,” he said.

The Senate passed the bill Friday, authorizing the governor to reprogram or allocate $800,000 from his discretionary funds, “including the Lt. Governor’s discretionary funds,” capital improvement funding or Compact Impact funds as initial payment to MRC.

Lt. Gov. Diego T. Benavente recently called on the Legislature to immediately pass the settlement bill to save the government from huge financial liabilities that would arise should MRC revive its claim against the government.

He said the government faces some $6 million in claims from MRC.

The 2003 agreement calls for the total of $3 million payment to MRC: $800,000 as initial payment and $2.2 million in deferred monthly installments over 20 years.

The $2.2 million can be paid through the operating revenues of Outer Cove Marina or through tax credits.