Senate President Edith Deleon Guerrero reacts while presiding over an emergency session on Wednesday.
Sen. Frank Q. Cruz, center, and Senate Vice President Donald Manglona, left, listen to Sen. Paul A. Manglona.
THE Senate, in an emergency session on Wednesday, unanimously passed its own version of House Bill 23-104, which would appropriate $5.2 million for the retirees’ 25% benefit.
The funding source is the dividend collected by the Commonwealth Economic Development Authority from the Commonwealth Utilities Corp.
The bill now goes back to the House of Representatives.
All nine senators were present to vote in favor of the bill as amended by the Senate Fiscal Affairs Committee following a meeting on Tuesday with CEDA Executive Director Manny A. Sablan, Economic Manager Dave Guerrero, Comptroller Derek Sasamoto and Executive Assistant to the CEDA Board Espie Borja.
H.B. 23-104 was introduced by Rep. Blas Jonathan Attao to prevent the suspension of the 25% of the retirees’ pension, which, according to Gov. Arnold I. Palacios, would be suspended on April 15, 2024, due to lack of funding.
The Senate version struck out the provision that would require the Finance secretary to repay CEDA “subject to the availability of funds.”
The Senate version also removed the language indicating that once repaid, the funds may be used to address exclusively local matters of Saipan. The Senate Fiscal Affairs Committee report described this as a “specific restriction” in the future use of the funds.
During the committee meeting on Tuesday, CEDA’s Sablan and Borja shed more light on the source and availability of the funds.
In 2009, CUC and the Commonwealth Development Authority (CEDA’s predecessor) entered into an agreement to convert CUC’s $45 million debt into preferred stocks with a 2% dividend rate. Under the preferred stock agreement, CDA would receive an annual dividend from CUC.
Sablan told the senators that CUC paid CEDA the money that the Public School System paid CUC.
He said 2% of the $45 million is the $1.08 million in annual dividend due to CEDA. This had accumulated to $12 million since CUC started remitting payments to CEDA in 2016. In 2020, however, then-Gov. Ralph DLG Torres used his reprogramming authority under the Covid-19 emergency declaration to tap $5 million of the funds.
Sablan said the $5.2 million in CEDA funds that H.B. 23-104 would appropriate are all that is left of the dividend payments.
Governor Palacios said the bill would allow the 25% payment to last until Aug. 31, 2024.
