Introduced by Rep. Raymond D. Palacios, Covenant-Saipan, House Bill 17-165 stated that due to its current financial condition, the CNMI government cannot pay judgments.
To avoid a further increase in interests due to government’s failure to pay, the governor might as well be allowed to settle debts through offsets and credits on any tax obligation, the bill added.
H.B. 17-165 is similar to H.B. 17-131 which specifically proposes to settle the government’s debt to businessman Jack Manglona.
In his veto message to the presiding officers of the Senate and the House or Representatives, Fitial noted that H.B. 17-165 empowers the Legislature to appropriate funds for the settlement of government debts.
Approving this measure, the governor said, “would allow claimants to circumvent that law and take away the appropriation power from the Legislature while impacting the general fund by offsetting and crediting tax obligations.”
Fitial said the language of the bill concerns him because “it is broad and sets no definite boundaries for settlement negotiations, which may result in more harm to the general fund and other government agencies.”
Fitial said he is “cognizant of the pending judgments against the CNMI government and the obligation to settle them.”
Still, he added, “I must also balance the need to preserve our dwindling resources in order to effectively provide services to our commonwealth.”
