REFALUWASCH rights advocate Melvin L.O. Faisao is urging the House of Representatives to amend the law and impose a developer’s tax on military construction projects.
Public Law 8-23 imposes a 2% tax on the total project cost of new infrastructure developments in the CNMI. The funds collected from the developer’s tax are appropriated by the respective legislative delegations of Rota, Tinian, and Saipan, exclusively for infrastructure improvements in each senatorial district.
A former House member, Department of Community and Cultural Affairs secretary and current adviser to the Uraali Refaluwasch Association, Faisao told House members during Monday’s session about the “urgent need to clarify the scope and application of the developer’s tax, particularly as it relates to U.S. military construction projects in the Commonwealth.”
He noted that more than $153 million worth of military construction projects are ongoing in the CNMI. Meanwhile, he said, “our roads, utilities, and public services continue to bear the strain of large-scale development — most especially on our beautiful island of Tinian.”
Faisao acknowledged that the 1975 technical agreement under the Covenant “shields the U.S. military from local taxation.” But, he asked, “Are private contractors, funded by the federal government, also exempt from paying a local developer’s tax?”
He argued that these contractors are not government agencies but commercial firms operating on the islands — “benefiting from our land, infrastructure, and permitting systems, while contributing little to our local workforce or economy.”
As a concerned citizen, Faisao said he is respectfully asking the House to take these actions:
– Seek the opinion of the Office of the Attorney General on whether the developer’s tax can legally apply to military contractors.
– Consider amending the Developer’s Tax Act to explicitly include federally funded projects.
– Initiate oversight hearings to assess the total financial impact of such exemptions on the CNMI’s infrastructure and economy.
“This is not about opposing federal presence or military readiness. It is about fairness, transparency, and ensuring that everyone who builds in our islands contributes to the well-being of our communities,” Faisao said.
