§ 10603. CEDA-CUC Loan Principal and Interest Write-off
TITLE 4: ECONOMIC RESOURCES DIVISION 10: COMMONWEALTH ECONOMIC DEVELOPMENT AUTHORITY § 10603. CEDA-CUC Loan Principal and Interest Write-off. The Commonwealth Economic Development Authority (CEDA) is hereby au- thorized to waive the sum of 22,750,000.00 of the principal amount of 140 million direct grant assistance to the CNMI from the federal government without any repayment requirement. The Legisla- ture further finds that CDA acted as a conduit for the distribution of the said funds which was to be used for infrastructure development in the CNMI. CDA distributed the said funds to various government agencies, other than CUC, without requiring the said agencies to pay back the funds given to them. Arguably, CUC, too, should not have to pay back the funds given to it by CDA and the funds were used for infrastructure development,
TITLE 4: ECONOMIC RESOURCES DIVISION 10: COMMONWEALTH ECONOMIC DEVELOPMENT AUTHORITY i.e. power, water, and sewer projects. Accordingly, the Legislature further finds that it is in the best interest of the CNMI to write off in full CUC’s loans from CDA in order to promote the stability of CUC and to secure the continuity of public utility services to the people of the CNMI. Furthermore, the Legislature further finds that Public Laws 12-1 and 13-36 are impediments in the way of rehabilitating and reorganizing the Commonwealth Utilities Corporation. Accordingly, the legislature finds that it is in the best interest of the people of the Commonwealth to repeal the above-referenced public laws. PL 15-44 took effect on January 23, 2007, and contained the following find- ings and purpose in addition to severability and savings provisions: Section 1. Findings and Purpose. To further the purpose of Public Law 15-12 to remove impediments to rehabilitating and reorganizing the Com- monwealth Utilities Corporation, the legislature finds that Section 2 of said law must be amended due to potential, inadvertent consequences that may result. Section 2 of Public Law 15-12 provides, in part, that: … in the event that the power generation system for the CNMI is pri- vatized and controlled by an independent power producer, fifty percent of the principal amount of $45,500,000.00 shall be paid by the inde- pendent power producer to the Commonwealth Development Author- ity. Such payment shall be reserved and used for loan programs admin- istered by the Commonwealth Development Authority or its successor agency. The Legislature finds that the above language not only impedes the likeli- hood of privatization of the Commonwealth Utilities Corporation but also heightens the risk that the cost to the independent power producer who takes control of the CNMI’s power generation system might be borne ulti- mately by Commonwealth consumers should the above-cited language re- main in the statute. Either result is not in the best interest of the CUC and the already suffering people of the CNMI. Therefore, the purpose of this act is to ensure that privatization in unimpeded and no financial burden because of privatization is placed on Commonwealth consumers.
Source: CNMI Law Revision Commission