By Emmanuel T. Erediano
emmanuel@mvariety.com
Variety News Staff
THE House leadership and the Marianas Public Land Trust remain deadlocked on the terms of a $29 million loan, which could provide the CNMI government with an improved fiscal year 2026 budget.
In submitting the proposed budget revision, Gov. David M. Apatang last week urged the Legislature to address MPLT’s requirement to secure the loan for retirees’ pensions. Specifically, he asked lawmakers to pass a bill authorizing MPLT to reenter into a margin account transaction and mandating the Department of Public Lands to remit reserve funds.
Last week, Rep. John Paul Sablan, chair of the House Ways and Means Committee, pre-filed House Bill 24-68, conditionally authorizing MPLT “to establish a margin account solely to facilitate the $29 million loan authorized under Public Law 24-13, subject to the continuing fiduciary and constitutional duties of the Trustees.”
Section 103 of the bill requires MPLT to “at all times, remain subject to the fiduciary obligations imposed by Article XI, Section 6 of the Commonwealth Constitution, including the duties of prudence, loyalty, and preservation of corpus.” H.B. 24-68 also clarifies that nothing in the bill “shall be construed to deem any margin transaction prudent per se, nor to confer indemnification or immunity upon any Trustee.”
In response, the House leadership issued a joint statement Friday, reaffirming that MPLT already has full statutory authority under P.L. 24-13 to execute the $29 million loan for retiree pensions. The lawmakers stressed that P.L. 24-13 “not only authorizes the transaction but also provides indemnification of the Trustees, leaving no need for additional enabling legislation.”
Speaker Edmund S. Villagomez said the law “was crafted to ensure both fiscal flexibility and constitutional protection. Public Law 24-13 gives MPLT every legal tool it needs to complete this transaction responsibly. The Trustees do not need another law — they need to exercise prudence and uphold the fiduciary duty imposed by Article XI of our Constitution.”
Sablan emphasized that prudence, not pressure, must guide the process. He said, “PL 24-13 is the authority. The Trustees can complete the $29 million loan today. What we will not do is legislate a shortcut that shifts risk from fiduciaries to taxpayers.”
House Floor Leader Marissa R. Flores noted that oversight ensures confidence, not delay. “Everyone wants retirees paid and the Commonwealth fiscally stable. But stability comes from discipline, not shortcuts. MPLT has the authority — what’s needed now is careful execution,” she said.
Rep. Blas Jonathan “BJ” Attao, chair of the Committee on Federal and Foreign Affairs, said new legislation would only complicate matters. “The Legislature already acted decisively through Public Law 24-13. What’s being asked for now is not authority but insulation — and that’s not our role to provide,” he said.
Rep. Vincent R. Aldan added, “The prudent-investor rule allows MPLT to use short-term liquidity tools within reason. Writing margin authority into statute doesn’t add protection — it only dilutes accountability if markets turn.”
Rep. Joel C. Camacho reaffirmed the legal sufficiency of the current statute: “P.L. 24-13 already authorizes the loan, specifies repayment, and indemnifies the Trustees. Any claim that MPLT cannot proceed without new legislation is unfounded.”
The House leadership reiterated in a joint statement that sound investments must be demonstrably prudent on their own merits — not by legislative declaration. They referenced the Oct. 1, 2025, joint letter from Senate President Karl King-Nabors and Speaker Villagomez, noting that P.L. 24-13 provides all authority and protection required for MPLT to act.
The House leadership said the latest H.B. 24-68 was introduced “to provide express authority to engage in margin trades, but it does not include any indemnification — consistent with the Trustees’ own assertion that their actions are fully prudent. Accordingly, the House sees no need to amend the current draft. Any new legislation at this stage would introduce needless delay and would itself be imprudent.”
In an email to the administration and Legislature, MPLT legal counsel Robert T. Torres said, “The view from the Trustees as to this pre-filed legislation is that it will not work and will fall short of moving the transaction forward.”
Torres said Section 103 of the bill “eviscerates the defense/hold harmless provision from Public Law 24-13 and states in no uncertain terms that the margin account is not to be construed as ‘prudent per se.’ This language is the same as saying that proceeding with the margin account is, in fact, not a prudent investment.”
He added, “Because the Constitution confines the Trustees to reasonable and prudent investments, legislation that construes a margin account transaction as not prudent and not protected by P.L. 24-13 should guide the Trustees in one direction: to not proceed with the transaction. MPLT hopes this was not the intent of the drafters of the legislation, but it is certainly within the Legislature’s purview to file legislation as it sees fit.”
Torres noted that discussions are ongoing: “It appears that we may not be progressing toward the transaction at this point. The Trustees look forward to further opportunities to confer with the Administration and Legislature to see if there is any way to navigate the matter that results in the transaction. We are not there yet.”
He also pointed out that the bill does not address DPL’s requirement to hold no further reserves and remit at least $1 million per fiscal year. “Without this condition and proper authorization language for the margin account, such as the draft advanced by the Administration, the matter remains static,” Torres said.
Torres concluded, “MPLT remains open to necessary and proper discussions to achieve clarity of purpose and resolution. MPLT confirms its standing commitment to work further in this regard.”
MPLT is a constitutional trust whose purpose is to manage the net revenues received from the Department of Public Lands from the leasing of CNMI public lands.
Emmanuel “Arnold” Erediano has a bachelor of science degree in Journalism. He started his career as police beat reporter. Loves to cook. Eats death threats for breakfast.
