Introduced by Rep. Joseph P. Deleon Guerrero, R-Saipan, House Bill 17-58 aims to “clarify some ambiguous provisions” in the QC law.
Although foreign investors contribute to the CNMI economy in form of taxes and employment, the bill noted that “meaningful participation” of the people in terms of ownership and joint ventures is “sorely lacking” in the QC program.
H.B. 17-58 wants to include “public benefit contributions or investment” as requirement to get a QC for a tax exemption. The bill also wants the QC program to assist U.S. citizen and permanent resident entrepreneurs in building or expanding industries.
The measure also raises the minimum investment amount from $1 million to $10 million for new investment and up to $2.5 million for expansion.
It also increases non-refundable filing fees paid annually.
The bill raises the filing fee by $2,000 — from $5,000 to $7,000 — for franchise restaurants, water parks, aquariums, convention centers and dinner centers.
The bill retains the $10,000 fee for theme parks, hotels and golf courses and reduces the fee for airlines by $2,500 — from $5,000 to $2,500.
The bill added new investment types like internet-related businesses which have to pay a $3,500 filing fee and manufacturing and processing of high technology products which has to pay $2,500.
H.B. 17-58 also imposes up to $3,000 in filing fee for expansion of businesses.
Inos, in his veto message, said “it is unsound to raise filing fees at a time when our economy is struggling to attract investors and to even maintain the current ones.”
The measure, he added, not only raises fees but imposes annual fees in addition to monitoring fees.
He said the annual and monitoring fee could be redundant.
Inos also noted that H.B. 17-58 allows the Commonwealth Development Authority’s board chairman to approve and issue QC’s.
Since QC deals are between the beneficiaries and the CNMI government, the governor should remain the approving and issuing authority of the benefit, Inos said.
The CDA chairman, he added, does not have the authority to award tax relief.
