House overrides governor’s veto

The House of Representatives mustered enough votes yesterday to override the veto action on a bill that aims to keep the expenditure authority on federal grants away from the governor.

House Bill 14-144, which requires legislative approval prior to the use of federal funds, was disapproved by Gov. Juan N. Babauta over a week ago.

In yesterday’s session, House members voted 12-1-3 in favor of overriding Babauta’s veto on the bill, with Rep. Martin B. Ada abstaining and three members opposing it: Reps. Janet U. Maratita, Joseph Deleon Guerrero, and Benjamin Seman.

Lawmakers who voted “yes” to the override action were House Speaker Benigno R. Fitial, who authored the bill; Heinz S. Hofschneider, Vice Speaker Timothy P. Villagomez, David Apatang, minority leader Arnold I. Palacios, Jesus Attao, Oscar M. Babauta, Clyde K. Norita, Crispin Ogo, Jesus Lizama, Justo Quitugua, and Norman S. Palacios.

Two members were absent: Ramon Tebuteb and Ray Yumul.

In his veto message, Babauta said that the bill “impermissibly encroaches upon the authority of the United States Congress to appropriate federal funds” as it amends the CNMI law related to the use of “federal grant funds” to require legislative approval on “state” level prior to the expenditure of such funds.

Babauta cited a U.S. court ruling, which stated that “the federal government, unless barred by some controlling constitutional prohibition, may impose the terms and conditions upon which its money allotments to the states shall be disbursed, and…state law or regulation inconsistent with such federal terms and conditions is to the extent invalid.”

As such, Babauta said, the CNMI government cannot place restrictions on eligibility for federal funds and use of the funds that are inconsistent with the federal government’s restrictions on the funds.

If passed into law, he said the bill would be rendered invalid “pursuant to the supremacy clause of the U.S. Constitution.”

In his letter to the Legislature, the governor conceded that requiring legislative approval for Section 702 funds is consistent with the intent of the U.S. Congress in previous Covenant Section 702 funding agreements—including the 1992 Section 702 agreement, which involved the expenditure of local funds—but he also pointed out that Section 703 of the Covenant states that “funds provided under Covenant 702 are to be considered local funds only to the extent that they are used as the local share required to obtain federal programs and services.”

He said that the current seven-year 702 funding agreement, signed on Feb. 9, 2004, “does not require local matching funds and unambiguously provides that the CNMI Executive Branch is the grantee and spending authority for all federal funds to be used for CIPs.”

The U.S. Congress, he said, in approving the current 702 funding agreement, acknowledged the importance of continued consultation between the CNMI Executive Branch and respective legislative delegations in submitting CIP spending for the Commonwealth.

“This administration takes this responsibility seriously and continues to work with the respective legislative delegations,” he said.

Mandating legislative approval for the expenditure of federal funds from the Compact Impact, he said, would also be “inconsistent with the intent of the U.S. Congress as expressed in the Compact of Free Association Act of 1985,” which was adopted by the U.S. Congress in 1986.

He cited that Compact funds do not require local matching and are “subject to the expenditure of the Executive Branch of the respective entities that are eligible to receive the funds.”

Further, the governor said that if legislative approval is required prior to the expenditure of federal funds, it may violate the terms and conditions imposed on grant money and may jeopardize the CNMI’s eligibility for future grants.

He said it may also cause delay in the use of funds appropriated by the U.S. Congress for specific purposes; and it would make it extremely difficult to comply with the accounting and reporting requirements.

Currently, the governor expenditure authority over some $12 million to $13 million a year in 702 CIP funds as well as $5.1 million Compact money a year from Congress.