Inos nixes QC fee hike; wants QC OK to remain with gov

Acting governor Eloy S. Inos said on Saturday it is unsound to raise the filing fees for qualifying certificates when the economy is struggling to attract investors, and that the approval and issuance authority over the tax incentive program should remain with the governor as the head of state.

The acting governor said this when he vetoed House Bill 17-58, Senate Draft 1, which seeks to reform the Qualifying Certificate Program.

The QC program grants tax breaks to investors to put up new investments in the CNMI, or assist existing investors to expand their operations.

“While I understand the Legislature’s intent to improve the QC program, I urge the Legislature to revisit the proposed amendments by engaging in active discussions with the business community,” Inos said in his veto message to House Speaker Eli Cabrera (R-Saipan) and Senate President Paul Manglona (Ind-Rota).

Rep. Joseph Deleon Guerrero (R-Saipan), main author of the bill, said yesterday he’s a bit disappointed that his bill got vetoed when it is supposed to reform an outdated law to make it “conform to the needs of the times.”

But Deleon Guerrero said he cannot fully comment on the issue until he sees the actual veto message. He said he expects to see the veto message today.

HB 17-58, SD1 identifies the chair of the Commonwealth Development Authority board of directors as the approving and issuing authority for QCs.

“QCs are contracts entered into by and between the CNMI government and the beneficiaries of the QC, which provide tax relief for qualified investments. As such, the approving and issuing authority should remain with the governor as the head of state. The CDA board chairperson does not have the authority to award tax relief to any individual or company,” Inos said in his veto message.

The acting governor also disagreed with the bill’s intent to raise QC fees, at a time when the CNMI is struggling to woo investors and to even maintain the current ones.

“This measure not only raises initial filing fees for many qualifying investment activities; it even requires annual fees in addition to monitoring fees. The annual and monitoring fee could be viewed as redundant charges for the same purpose,” Inos added.

Under the bill, the QC application fee could go up by up to $4,500 in certain business types compared to Public Law 12-32.

The bill also imposes annual monitoring fees of $1,500 to $3,000, among other things.

Rep. Froilan Tenorio (Cov-Saipan), who is one of the lawmakers wanting the QC program to be reformed, earlier said the government will continue to lose some $15 million in annual revenue if the program is not reformed.

The Senate substitute version of the House bill increases and lowers the application fees for certain types of businesses.

Among the investors in the CNMI with approved qualifying certificates include Lao Lao Bay Golf Resort, Sandy Beach Homes and Saipan World Resort.