HOUSE Speaker Heinz S. Hofschneider and eight other representatives have pre-filed legislation to raise the user fee paid by the garment industry.
House Local Bill 13-25 seeks to impose an additional 1.3 percent user fee on the gross value of merchandise exported. The garment industry currently pays a 3.7 percent user fee.
Hosfchneider, R-Saipan, said a review made by Saipan lawmakers on revenue raising options determined that it would be “practical and reasonable” to get the money from the garment industry.
“Because Saipan is the location of all garment manufacturers in the CNMI and because the deterioration of Saipan’s quality of life and standard of living can be attributed to the proliferation of garment factories on the island, the delegation finds it appropriate to assess an additional fee on all Saipan garment manufacturers,” the speaker said.
He said the island’s lawmakers also considered the “possible consequence” of forcing garment manufacturers to shut down their operations on Saipan.
However, the U.S. economy “is rebounding and the demand for merchandise manufactured in Saipan is expected to continue to grow.”
Hofschneider said “it is reasonable to presume that the manufacturers who remain in business could make up the anticipated loss of volume resulting from the closure of the undercapitalized manufacturers due to the additional fees.”
Saipan lawmakers said the end of the island’s garment industry is “imminent” as trade barriers will be removed and the advantage of Headnote 3(a) will eliminated at the end of 2004.
To prepare for the eventual loss in revenue and jobs, the speaker said “it is incumbent on the delegation to explore meaningful alternative economic activities by turning to outside investments.”
Among the projects that the House want to see completed is the Grapan revitalization project which is expected to boost the island’s tourism industry.
