COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS
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1 COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS Benigno R. Fitial Governor Eloy s. Inos Lt. Governor December 3,2011 Honorable Eliceo "Eli" D. Cabrera Speaker, House of Representatives Seventeenth Northern Marianas Commonwealth Legislatue Saipan, MP Honorable Paul A. Manglona President, The Senate Seventeenth Northern Marianas Commonwealth Legislature Saipan, MP Dear Mr. Speaker and Mr. President: This is to inform you that I have signed into law House Bill No , HS1, HD I, SS1 entitled, "To authorize CUC to borrow $10 million dollars and to authorize the Executive Director to execute the loan the absence of an organized board of directors; and for other puroses," which was passed by the Seventeenth Northern Marianas Commonwealth Legislature. This bill becomes Public Law No Copies bearing my signature are forwarded for your reference. -\; Sincerely,, ;, ELOY S. INOS Acting Governor \ cc: Governor, Lt. Governor's Legal Counsel, Attorney General, Commonwealth Utilities Corpomtion, Public Utilities Commission, Public Auditor, Press Secretar, Deparbnent of Finance, Commonwealth Law Revision Commission, Special Assistant for Progmms and Legislative Review Caller Box Saipan, MP Telephone: (670) /2201 Facsimile: (670)
2 'T J{ouse of presentatives NORTHERN MARIANAS COMMONWEALTH LEGISLATURE P.O. Box Saipan, MP Public Law No December 1, 2011 The Honorable Eloy S. Inos Acting Governor Commonwealth of the Northern Mariana Islands Capitol Hill Saipan, MP Dear Acting Goveror Inos: I have the honor of transmitting herewith for your action H. B , HS1, HD1, SSl, entitled: "An Act to authorize CUC to borrow $10 million dollars and to authorize the CUC Executive Director to execute the loan the absence of an organized board of directors; and for other puroses.", which was passed by the House of Representatives and the Senate of the Seventeenth Northern Marianas Commonwealth Legislature. Sincerely yours, C... Lu House Clerk Attachment
3 SMenteentli Lcgfature afthe ContOtaltJi ojtjie Nottfu!Marina 1 sfands IN THE HOUSE OF REPRESENTATIVES Seventh Special Session July 14,2011 Representative Stanley T. McGinnis Torres, of Saipan, Precinct 3 (for himself) in an open and public meeting with an opportunity for the public to comment, introduced the following Bill: B. B AN ACT TO AIIEND 4 elle 18123(E) TO PROVIDE THAT BOBBOlfNG BY cue IN DeESS OF.500,000 IIUST BE APPROVED BY THE OOIlIlOl TB UTUTIES OOIlIlISSION. The Bill was referred to the House Committee on Public Utilities, Transportation, and Communications, which submitted Standing Committee Report , which was adopted on October 20, THE BILL WAS PASSED BY THE HOUSE OF REPRESENTATIVES ON FIRST AND FINAL READING, OCTOBER 20, 2011; with amendments in the form ofh. B , HS1, HD1, and transmitted to the THE SENATE. The Bill was not referred to a Senate Committee. THE BILL WAS PASSED BY THE SENATE ON FIRST AND FINAL READING, NOVEMBER 16, 2011; with amendments in the form ofb. B , HS1, HDI, SSt. H.B ,HSl,HDl, SSl WAS RETURNED TO THE HOUSE OF REPRESENTATIVES ON NOVEMBER 21,2011. The House of Representatives accepted the Senate amendments and passed H. B , HS1, HD1, SSl during its 10th Day, Fourth Regular Session on December 1,2011. THE BILL WAS FINALLY PASSED ON DECEMBER 1, 2011.c:;;;; Linda a una, HOe Clerk
4 Comol1'weaftli Seventeentli egisfature of ojtjie the Northern 9darina I sftl1ufs IN THE HOUSE OF REPRESENTATIVES TENTH DAY, FOURTH REGULAH, S:ESSION DECEMBER 1, 2011 II. B , as 1 OJ. 110 I., SS I AN ACT '1'0 AIJTHORIZE ( IJC TO IIORROW $10 MILLION noliars ANn TO AIJTHORIZE THE CIJC I XI CIJTIVE ))IRI ( OR 'f EXECIJ1'1 TIII LOAN 'fhe ADSENCI 011 AN ORGANIZlm DOABn OIl I))RI CTORS; ANn FOR O'fHER PIJRPOSES. Be it enacted by the Seventeenth Northern Marianas Commonwealth Legislature: 1 Section 1. Findings and Purposes. The Legislature finds that the 2 Commonwealth Utilities Corporation ("CUC") is the sole electricity supplier to 3 the Governent of the CNMI, including all public safety activities, the schools, 4 and the only hospital. CUC also supplies electricity to most of the CNMI's 5 businesses and homes. The people of the Commonwealth demand and deserve 6 reliable power at affordable rates delivered by an effcient, well-managed utility 7 service. We recognized in PL 16-17, Section 2, that to achieve this goal, the 8 Commonwealth Utilities Corporation (CUC) requires an infusion of funds. 9 A source of funding may be available through CUC's issuance of public utility
5 HOUSE BILL , HS1, HD1, SSI 1 revenue bonds or through the private sector and other funding sources that are 2 independent of the Commonwealth governent. 3 The Legislature further finds that CUC has numerous maintenance 4 projects it must complete, and the accumulated depreciation of CUC's capital 5 assets is now at an astounding 69%. Pursuing maintenance is essential to keeping 6 CUC able to provide reliable power to customers. In addition, CUC bears a 7 substantial obligation to deliver highly technical work on time to the satisfaction 8 of the US Distrct Court and the US Environmental Protection Agency, pursuant 9 to two sets of consent, or "stipulated" orders (United States v. eue, Civ. Action 10 No , Distrct Court of the Northern Mariana Islands). Failure to meet the 11 requirements of the federal cour orders could subject CUC and the CNMI to 12 substantial fines and charges, and, in the extreme, to a federal receivership of 13 CUC's finances and operations. 14 CUC had been granted the power to borrow money and give security for a 15 loan outright in an amount up to $500,000.00, with the provision that any 16 borrowing in excess of $500, "shall be approved by law." See 4 CMC (e). However, Executive Order amended 4 CMC 8123(e) in 2008 to 18 increase the amount to 5 million dollars, although this amendment may be 19 unconstitutional. 20 Accordingly, the Legislature finds that it is in the best interest of CUC for 21 the legislature to authorize CUC's proposed $10 million dollar loan from 22 Independence Bank of East Greenwich, Rhode Island. 2
6 HOUSE BILL , HS1, HD1, SS1 1 Furthennore, the Legislature finds that the CUC loan cannot be legally 2 executed without authorizing the executive director to act on behalf of the 3 corporation in the absence of an organized Board of Directors. Therefore, this 4 Act grants the executive director the power to execute a loan with Independence 5 Ban. 6 Section 2. CUC Loan Authorization. 7 Notwithstanding any law or regulation to the contrary, the Commonwealth 8 Utilities Corporation (CUC) is hereby authorized to borrow an amount up to 9 $10,000,000 from Independence Bank of East Greenwich, Rhode Island and 10 guaranteed by the United States Deparent of Agriculture subject to CPUC 11 approval to fund CUC's obligations under the Stipulated Orders entered in USA 12 v. CUC and CNMI [No ] [DNMI] and for other projects on Rota and 13 Tinian, as set forth on the loan schedule of projects. 14 Section 3. CUC Executive Director Power to Approve Loan. 15 Notwithstanding any law or regulation to the contrary, in the absence of a 16 Board of Directors, the Executive Director of CUC shall serve in the place of the 17 Board of Directors with all powers necessary to approve and execute a loan with 18 Independence Ban of East Greenwich, Rhode Island. 19 Section 4. Severability. If any provision of this Act or the application of 20 any such provision to any person or circumstance should be held invalid by a 21 court of competent jurisdiction, the remainder of this Act or the application of its 3
7 HOUSE BILL , HS1, HD1, SSI 1 provisions to persons or circumstances other than those to which it is held invalid 2 shall not be affected thereby. 3 Section 5. Savings Clause. This Act and any repealer contained herein 4 shall not be construed as affecting any existing right acquired under contract or 5 acquired under statutes repealed or under any rule, regulation or order adopted 6 under the statutes. Repealers contained in this Act shall not affect any proceeding 7 instituted under or pursuant to prior law. The enactment of this Act shall not have 8 the effect of terminating, or in any way modifying, any liability civil or criminal, 9 which shall already be in existence at the date this Act becomes effective. 4
8 HOUSE BILL , HSt, HDt, SSt 1 Section 6. Effective Date. This Act shall take effect upon approval by 2 the Governor or upon becoming law without such approval. Attested to by: Linda B. Muna, House Clerk Certified by: ELICEO Ii" D. CABRi1if, SPEAKER ELOYS.INOS Acting Governor Commonwealth of the Northern Mariana Islands 5
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