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Biz transfer within garment industry OK’d
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Posted on Aug 21 2005
Gov. Juan N. Babauta has approved a bill that would allow the transfer of business licenses within the garment industry.
Babauta approved House Bill 14-323, saying the new law would allow existing garment manufacturers wanting to expand their operations “to take over the businesses of those smaller companies that have ceased operations.”
The measure applies only to companies that closed down this year or after the lifting of quotas by the World Trade Organization.
Alternatively, he said the new law would allow new investors to take over existing business licenses.
“This measure, therefore, will allow for the efficient allocation of current garment workers in the Commonwealth who are, or may become, displaced by external economic factors,” he said.
He noted that the Legislation maintains strict compliance with the existing 15,727 cap on the number of garment workers.
Further, the governor said the measure would promote economic stability in the industry “without rewarding or benefiting those that ceased operations prior to Jan. 1, 2005, especially those that may have failed to honor their statutory and contractual obligations to their employees and the Commonwealth.”
H.B.14-323, authored by Rep. Jesus SN. Lizama, who chairs the House Committee on Judiciary and Governmental Operations, said there is a need to relax the prohibition on the transfer of business licenses given the “the current period of adjustment within the garment industry.”
The bill provides that the Finance Department may transfer a business license to a new garment manufacturing company if the license is revoked, not renewed, lapsed, or if the owner has ceased operations.
At least three garment manufacturers have closed down and many others have downsized their operations since January this year in the CNMI.
H.B. 14-323 becomes Public Law 14-82.
