In a letter to lawmakers, Retirement Fund Administrator Richard Villagomez said they “strongly oppose” H.B. 17-40 because it will allow only 60 percent of judiciary collections, which include criminal and civil fines to be deposited and credited to the judiciary building fund.
The judiciary building fund goes to the Retirement Fund which financed the construction of the judiciary building as part of its local investment portfolio.
The judiciary has yet to pay the Retirement Fund $6.1 million for the building. Pursuant to the agreement between the government and the pension agency, the judiciary, through its judiciary building fund, will pay the Retirement Fund $118,245 a month.
This payment, Villagomez said, is “guaranteed by the full faith and credit of the CNMI government which pledged to maintain a separate debt service account exclusively” for paying the loan.
Due to a decrease in the courts’ collections, the judiciary is now “struggling to make monthly payments,” Villagomez said.
Diverting 40 percent of the collections, as H.B. 17-40 proposes, may not allow the judiciary to make timely payments, he added.
Failure to pay on time, he said, will place the loan in default which could result in an “acceleration of payments” or foreclosure.
It is also not clear in the bill, Villagomez noted, where the 40 percent of the judiciary’s collections would go.
The local business community is also opposed to the bill, saying it will impose new burdens on the private sector amid a worsening economic crisis.
Business leaders said the government should cut costs instead of raising fees and taxes.
