Inos likely to sign casino bill but…

Gov. Eloy S. Inos said he is likely to sign the Saipan casino bill but would ask the Legislature to immediately amend it to ensure tax rebates remain in place and that the exclusive casino license duration does not violate land provisions of the NMI Constitution, among other concerns. The governor also weighed in on the bill’s other provisions at a time when a private group launches a signature drive targeting 25 percent or over 3,200 of Saipan’s registered voters to place the question on the ballot in November.
The governor shares the Saipan Chamber of Commerce and other entities’ concerns that the bill as currently written “just wiped out” the tax rebate, except for the would-be Saipan casino license holder. Inos, however, believes it was not a deliberate act to scrap the program.

“Part of the thinking right now is to propose an amendment to restore the rebate schedules,” Inos said in an interview during Friday’s breadfruit initiative update at the Kagman agriculture center.

It was also the governor’s first media interview since coming back two weeks ago from a series of meetings in Washington, D.C.

When pressed to clarify whether he would veto the bill or sign it with a notation to the Legislature to amend certain provisions, the governor said it’s “the latter.”

“It’s probably easier and more expeditious if I [go with] the latter procedure,” he said.

Alex Sablan, president of the 160-member Saipan Chamber of Commerce, said it is not fair that the bill as written does away with the tiered tax rebate for taxpayers in the CNMI except for the would-be exclusive casino license holder.

He said the tax rebate is “one of the last real investment tools to attract investors” in the CNMI that needs to be maintained.

A rebate is for tax properly paid and is subsequently returned to the taxpayer under a rebate provision.

Once the casino bill is officially transmitted by the House of Representatives to the governor’s office, the governor has 40 days to act on it or the measure automatically becomes law.

Inos also said the up to 80-year exclusive license “could be in direct violation of the Constitution for both Articles 11 and 12, so that’s gonna have to be changed.”

Under the measure, within 15 days of the bill’s signing into law, a nonrefundable $1 million application fee and a partial $30 million casino license fee both have to be paid.

“It would be done with prior consultation of the leadership,” the governor said.

Rep. Trenton Conner (Ind-Tinian), one of those who voted against the Saipan casino bill, said there is no clarification to date whether the exclusive casino license holder will be allowed to operate casinos in more than one hotel. He is also seeking an answer whether these other casinos on the investor’s other hotels can be built on Tinian and Rota “since this is a Commonwealth casino bill.”

Casino gaming is currently legal only on Tinian and Rota. Conner said Tinian Dynasty Hotel and Casino, the only operating casino in the CNMI, could be negatively impacted by the newly-passed bill.

Conner added that there were no feasibility studies or any financial reports prepared in connection with the Saipan casino bill.

Investors

Inos said the bill is not tailored to a specific investor group, but added that different investor groups have visited the CNMI to show their interest in operating a casino on Saipan. He said this is the opportunity for these different investor groups—including those from China, Korea, Macau, and the U.S. mainland—to come in.

“Actually one of the problems that we have in really articulating on this thing is the absence of [law]; that casino gaming is not authorized so we can’t even talk much about it,” he said.

When asked whether E Land or Tan Holdings are among those interested in casino operations because of their hotel plans for Saipan, Inos said he’s not aware.

The governor added that the bill requires the construction of at least 2,000 hotel rooms, and what E Land or Tan Holdings plans is nowhere near that number.

He said if no investor applies for an exclusive casino license and make partial casino license fee payment within 15 days after the law signing, then “nothing happens” or the law can be amended.

As of Friday, the House of Representatives has yet to transmit to the governor’s office an official copy of the bill. House floor leader Ralph Demapan (Cov-Saipan) authored the measure.

But the governor said he has already reviewed a copy of the bill after it was passed last week. He said the bill, although not officially transmitted to his office yet, has already been undergoing review and he would also like to get input from different agencies and sectors.

He said it was a “slightly different version from the previous one that the Senate had shelved” a few months ago.

Revenues and funding

Inos said the $15 million annual payment is only for license fee, and this is on top of the gross receipts tax and other multiplier effects on the economy.

House and Senate members who voted “yes” to the Saipan casino bill said this major revenue-generating bill needs to pass to restore the 25 percent cut in retirees’ pension, ensure the government’s annual payment to the retirement settlement trust fund, and sustain an increase in health insurance premium rate, among other things. The governor supports the intent.

The governor is also recommending the allocation of any gross receipts tax on casino operations for the payment of retirement contribution interest withdrawals under Public Law 17-82.

Inos said he would also like some casino revenue to help subsidize the so-called LEAC rate. LEAC, which stands for the levelized energy adjustment clause, is one of the two components of a Commonwealth Utilities Corp. customer’s bill primarily for fuel expenses. The other component is the non-fuel expenses.

Some lawmakers, including Senate floor leader Ray Yumul (Ind-Saipan) and Sen. Paul Manglona (Ind-Rota), said the bill was passed without giving members ample time to review it, without a committee report, or without public hearings.

The governor said the concept of a Saipan casino bill is nothing new, although there were different versions. The bill was prefiled weeks after the formal introduction and passage in the House and later on, the Senate.

It was the first time that the Senate passed a Saipan casino bill from the House in four years. The passage also comes seven years since Saipan voters rejected for the second time the question of casino on the ballot.

Signature drive

Meanwhile, Isidoro T. Cabrera said yesterday that the Marianas Economic Research and Development Foundation has moved the launching of the Saipan casino signature drive to this week.

Robert Guerrero, executive director of the Commonwealth Election Commission, said on Friday that the group would need the signatures of at least 25 percent—and not 20 percent as earlier reported—of Saipan’s registered voters.

“That means they need over 3,200 signatures,” Guerrero told Saipan Tribune.

As of March 4, Saipan registered voters numbered 12,861, so MERDF needs at least 3,251 signatures.

Cabrera, MERDF president and board member, said they would work hard to gather more than the required signatures because the Office of the Attorney General, upon review of the signatures, might strike out some names.

If the group gathers the required percentage of signatures, then the question of whether voters want a Saipan casino or not would be placed on the ballot in the November general elections.