REPRESENTATIVE Angel Demapan on Friday introduced House Bill 22-70, which aims to promote economic development by offering tax incentives to investors who will build, expand and operate projects in the CNMI.
The measure will mandate the Commonwealth Economic Development Authority board to come up with a list of businesses that are eligible to apply for a qualifying certificate in line with the five-year economic development goal of the CNMI government.
Demapan said, “The provision of tax incentives is a common tool for economic development throughout the United States and the world, and competition for investments is greatly supplemented by efforts of these jurisdictions to implement economic development plans through the allocation of tax incentives.”
He believes that the Investment Incentive Act of 2000 served the purpose of its time in providing incentives — qualifying certificates — for the development of new investments in the Commonwealth; however, the structure of the program has not kept pace with an evolving competitive market for business investments, he added.
“At this juncture, it’s important to encourage the development of additional business investments and increased economic diversification of the Commonwealth economy by offering investors tax incentives to build, expand, and operate projects,” Demapan said.
“As global and regional economic landscapes change and industries evolve, it is an opportune time for the CNMI to update its portfolio for the challenges of the 21st century,” he added.
He said H.B. 22-70 is a collaborative product based on the recommendations of the Governor’s Council of Economic Advisers.
“The changes being proposed will ensure that incentives do not create an uneven playing field among private sector operators,” Demapan said.
The bill also includes the GCEA’s recommendation to grant CDA the authority to delineate Economic Development Zones throughout the Commonwealth. These can better target areas or islands in need of specific development in line with the development priorities of the Commonwealth’s municipalities and communities.
“These reforms to the qualifying certificate program are greatly needed to ensure that our economy thrives for generations to come,” Demapan said.
“Further, there will also be opportunities for existing businesses to avail [themselves of] these incentives for eligible expansion projects, finally leveling the playing field for many of our long-standing locally owned businesses. These businesses have been here for decades, in good times and in bad, so it’s only fair that they be allowed to avail [themselves of] incentives to further expand their business activities,” he added.
