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Senate holds off vote on POB bill
The Senate held off voting yesterday on a House legislative initiative that could pave the way for floating millions of dollars in bonds to help pay the government’s more than $320 million outstanding debt to the beleaguered NMI Retirement Fund. Senators referred the measure to a committee instead.
This comes barely a month before the Aug. 8 deadline to submit legislative initiatives to the Commonwealth Election Commission, for it to be placed on the Nov. 6 ballot.
Senate President Paul Manglona (Ind-Rota) asked the Special Committee on Retirement Fund Issues chaired by Sen. Jovita Taimanao (Ind-Rota) to expedite action on the initiative so it can be voted on during the next session.
If House Legislative Initiative 17-5 passes the Senate, the pension obligation bond initiative will be placed on the Nov. 6 ballot.
HLI 17-5 seeks to add a new Section 10 to Article 10 of the NMI Constitution to authorize the CNMI to issue pension obligation bonds.
At the same time, the Senate also postponed acting on a motion to override the governor’s veto of a revised version of a foreign corporation tax bill after senators raised concerns on the legislation.
“The Senate shouldn’t act on this until we see the action of the House, since this is a House bill,” said Senate floor leader Pete Reyes (R-Saipan).
Senate President Paul Manglona (Ind-Rota) asked Senate legal counsel Antonette Villagomez to work with House legal counsel John Cool and assistant attorney general Jim Stump in addressing senators’ concerns on the bill before the Senate could entertain it.
Cool was at the Senate session to answer senators’ concerns on the bill. Reyes, for example, asked about the consequences if the veto was overridden when lawmakers are later convinced that the governor was correct in vetoing the bill.
The revised bill was vetoed for the same reasons the first version was vetoed the first time around, and that was over violations of both the Covenant between the CNMI and the United States and the U.S. tax laws in the NMI Territorial Income Tax.
Rep. Ray Basa’s (Cov-Saipan) House Bill 17-288 seeks to create a tax rate for foreign corporations earning income from outside of the CNMI. It encourages foreign persons to establish a company in the CNMI and thereby shift their income to the Commonwealth and pay a lower tax on their income from foreign operations.
In vetoing the bill, Gov. Benigno R. Fitial said that HB 17-288, the foreign corporation tax bill, has an admirable goal of encouraging foreign corporations to conduct business in the CNMI. But because it violates section 601 of the Covenant and Section 861-865 of the NMTIT, the governor said he must veto the bill.
By Haidee V. Eugenio
Reporter
