THE House of Representatives on Thursday unanimously passed House Bill 23-77, which would authorize a revolving line of credit between the CNMI government and the Marianas Public Land Trust.
All of the 20 House members present voted to pass the bill, which now goes to the Senate.
Authored by Speaker Edmund S. Villagomez, H.B. 23-77 would allow the CNMI government to get a loan of up $15 million from MPLT. The loan will be used as “bridge financing” for the local costs related to the capital improvement projects funded by the U.S. Economic Development Administration.
The bill stated that Gov. Arnold I. Palacios requested MPLT for a $20 million line of credit, but MPLT had determined that a $15 million line of credit “is suitable for the amounts needed, in any given 45-day period during the next few years of forecast drawdown offered by the governor.”
Tinian resident Richard U. Hofschneider Jr. expressed his opposition to the bill during the public comments portion of the session.
He said it is an “injustice” to the indigenous people of the CNMI. He also asked the speaker to withdraw the bill.
The CNMI government, he added, should not touch MPLT funds because they belong to the indigenous people. Income earned from public lands must go to them directly, he said.
He also questioned the bill’s proposal to set the loan interest rate at 5.5%.
MPLT’s investment policy statement allows an interest rate of 6.3%.
But Rep. Blas Jonathan Attao said H.B. 23-77 “is not taking any money away from MPLT.”
The bill would allow a loan process to happen, during which MPLT and the administration will negotiate the terms of the loan, he added.
“If they don’t come to an understanding, then the money doesn’t go to its intended purpose,” he said.
Moreover, the bill states that the attorney general “shall review the revolving line of credit agreement for legal sufficiency….”
Attao said the line of credit with MPLT will allow the CNMI government to draw down money from the USEDA so that various infrastructure projects such as the Garapan Revitalization Project, which includes the improvement of the Paseo De Marianas, will be completed.
He said the CNMI government stands to receive over $60 million from USEDA.
All the CNMI government has to do is to spend at least $5 million in local funds “upfront,” but when federal monies “come in, then we will replenish the funds back to MPLT,” Attao said.
He noted that there is a guaranteed source payment for MPLT — the interest income due to the general fund.
As for Hofschneider’s complaint about the CNMI government’s request to reduce the interest rate to 5.5%, Attao noted that in previous loans, the central government paid MPLT a higher interest rate — 7%.
MPLT, for its part, has given out a loan at a lower interest rate to a private entity — 5%, Attao said.
Some businesses in Garapan told Variety last week that the construction at the Paseo De Marianas had stopped. The reason, according to a government official who requested anonymity, was that the contractor, USA Fanter, had not received any payment from the CNMI government, and the arrears “had already piled up to a significant amount.”
