Business Licensing Processing Act of 1998 (P.L. No. 11-73)

11-65 (Pawnbrokers Act of 1998) subsequent to P.L 11-29. §561 l(a) Public Law "as I believe it is also important to clarify for the public that, the Secretary of Finance's authority to make inquiry under Section 5 of the law is naturally subject to the constitutional requirements regarding a search of the premises. , .,.. This bill becomes Public Law No. 11-73. Copies bearing my signature are forwarded for your reference. Sincerely, CC: Secretary of Commerce Secretary of Finance Special Assistant for Programs & Legislative Review .- PUBLIC LAW NO. 11-73 'Ifie Senate NORTHERN MARIANAS COMMONWEALTH LEGISLATURE P.O. Box 129 Saipan, MP 96950 fE"D. 1 7 1999 Honorable Pedro P. Tenorio Governor Commonwealth of the Northern Mariana Islands Saipan, MP 96950 Dear Governor Tenorio: I have the honor to transmit herewith for your action one (1) original copy of Senate Bill No. 11-96, entitled, "An Act to transfer the function of business licensing from the Department of Commerce to the Department of Finance and for other purposes.", which was passed by the Senate and the House of Representatives of the Eleventh Northern Marianas Commonwealth Legislature. Sincerely , A SENATE LEGISLATIVE SECRETARY Attachment THE SENATE ELEVENTH NORTHERN MARIANAS COMMONWEALTH LEGISLATURE THIRD REGULAR SESSION, 1999 PUBLIC LAW NO. 11-73 SENATE BILL NO. 11-96 ------------=============================================================== AN ACT To transfer the function of business licensing from the Department of Commerce to the Department of Finance and for other purposes. =======-----=============================================================== Offered by Senator(s): Pete P. Reyes I . .DATE: December 17, 1998 SENATE ACTION Standing Committee Report No.: None Second and Final Reading: December 17, 1998 HOUSE ACTION Standing Committee Report No.: None First and Final Reading: February 10, 1999 ~ EDWARD U. MARATITA --- SENATE LEGISLATIVE SECRETARY PUBLIC L A W NO. 11-73 ELEVENTH NORTHERN MARIANAS SENATE BILL COMMONWEALTH LEGISLATURE NO. 11-96 THIRD REGULAR SESSION, 1999 AN ACT To transfer the function of business licensing from the Department of Commerce to the Department of Finance and for other purposes. RE IT ENACTED B Y T H E ELEVENTH N O R T H E R N MARIANAS COMMONWEALTH LEGISLATURE:

1 Section 1. Short Title. This Act shall be referred to as the "Business

3 Licensing Processing Act of 1998".

3 I , Section 2. Findings and Purpose. Tax compliance has long been a challenge -i in the CNMI, due to a lack of central control and sharing of data between various 5 entities. A great deal of inconsistencies will be resolved by centralizing the issuance 6 of business licenses with the agency which issues CNMI Tax Identification Numbers.

7 Such issues that will be resolved include, but are not limited to the following: detecting non-filers of tax returns: ascertaining whether taxes have been paid prior to 9 the issuance of a renewal of business license; allowing the Department of Finance to 10 close down a business if taxes are not paid, or using the same as a deterrent for 11 avoiding payment of taxes; allowing the Department of Finance to verify that a 12 business is engaged i n the activity stated on the license by comparing it to the activity 13 stated on the tax return; and assuring t h a t a business which imports goods for sale has an active business license and a11 taxes have been paid before allowing importation of 1 goods into the CNMI, PUBLIC LAW NO. 11-73 SENATE BILL NO. 11-96 By allowing the Department of Finance, Division of Revenue and Taxation to 2 issue a business license and at the same time issue the CNMI Taxpayer Identification

3 Number, there will be a tracking mechanism established that will not only serve the --+ Division of Revenue and Taxation, as the point of control, but the Division of Customs and the Department of Commerce as well. The integration of issuing business licenses into the Division of Revenue and Taxation is expected to result in 7 collection of a significant amount of additional taxes that are not collected due to the 8 lack of a single control point This should provide the CNMI with much needed revenue without the need to raise taxes at this point in time.

10 It is therefore the purpose of this legislation to transfer the function of issuing 11 business licenses from the Department of Commerce to the Department of Finance in 12 order to strengthen the Department of Finance's efforts to enforce tax compliance.

13 The day-to-day function of issuing licenses within the Department of Finance shall be handled by the Division of Revenue and Taxation.

1S Section 3. Amendment. Department of Finance: Duties and Responsibilities.

1 CMC section 2553 is hereby amended to add new subsections (I) and (m) to read:

17 "(1) To license businesses pursuant to 4 CMC § 5611. Except as 18 otherwise provided by law, the Department of Finance shall not issue or cause 19 to be issued any business license for the purpose of garment manufacturing.

20 The Department, as a condition of issuing a business license or renewal 21 thereof, may require proof of a tax clearance from the Division of Revenue 22 and Taxation. The Department may disclose the contents of the business license application to the public, however, i t shall not disclose "return" or

24 "return information" as t h a t term is defined in Northern Mariana Territorial ZS Income Tax (NMTIT) code section 6103. The Secretary of Finance shall have I'agc 2 PUBLIC LAW NO. 11-73 SENATE BILL NO. 11-96 1 the authority to promulgate rules and regulations for the purpose of carrying 2 out this provision."

3 (m) To suspend, revoke or deny the issuance of business licenses in --+ accordance with the Administrative Procedure Act CMC § 9101 et. seq.) 5 due to non-compliance with CNMI laws, including, but not limited to the (l reporting and payment of taxes. The Secretary of Finance shall have the 7 authority to promulgate rules and regulations for the purpose of carrying o u t 8 this provision <) Section 4. Amendment. Business License Fees. 4 CMC section 561 as 10 amended by P.L. 11-29 is hereby amended to read:

11 "(a) Business License Required. Before engaging in or continuing in 12 a business, a person shall first obtain from the Secretary of the Department of 1 ,"'I-~ Finance a license to engage in or conduct that business. 1-+ (b) In no event shall a business be required to purchase more than one 15 general business license for the same line of business for any location or 1() locations in the Commonwealth.

17 (c) Terms. Licenses issued under this section are valid for one year 18 and are not transferable.

19 (d) Fees. The following annual fees shall be paid to the Secretary of 20 the Department of Finance for the respective license at the time of issuance or L1 renewal :

22 ( I ) Banks, $500;

23 (2) Offshore banking corporations, $1,000; 2-+ (3) Securities dealers, $300; ·r _.) (4) Insurance companies, $300; Page 3 PUBLIC LAW NO. 11-73 SENATE BILL NO. 11-96

1 ( 5 ) Insurance brokers, $100;

3 (6) Insurance agents, $75; ( 7 ) Public utilities, $300; (8) Manufacturers, $50;

5 (9) Wholesalers, $50; (10) Roadside vendors selling local agricultural and fishery 7 products, $5: (1 1) Scuba instruction and scuba diving tour operations, $100;

0 (I 2) General business license covering all other businesses 1{) unless otherwise provided by this act, $50, per separate line of 11 business. 12 , (e) Renewal. A licensee may renew a license upon its expiration by ') 1 ,) the payment of the annual license fee. (9 All businesses licensed under this section shall only do business 1 under the name duly licensed and shall advertise this name i n romanized 1 lettering in addition to any other lettering.

17 (g) Conditions for Revocation or Suspension.

18 ( I ) The Secretary of the Department of Finance may revoke or 1 suspend any license issued under this section upon finding after two 20 weeks public notice and a hearing conducted pursuant to 1 CMC §§ ’1 9108-91 1 1 that:

3 ( i ) The application of the licensee contained false or fraudulent information; PUBLIC NO. 11-73 SENATE BILL NO.l.J.._ -96

1 (ii) The licensee bribed or otherwise unlawfully 3 influenced any person to issue the permit other than on the 3 merits of the application;

4 (iii) The licensee presented false or fraudulent 5 information to any person in support of his application;

0 (iv) The licensee violated subsection (f) of this section; 7 or cy (v) The licensee violated any provision of

3 Commonwealth law, including but not limited to n o n - 10 compliance with the tax laws, or any nile or regulation issued 11 thereunder. 12 l I (2) A n y person aggrieved by a license suspension or 13 revocation shall be entitled to a review of the same by the

14 Commonwealth Superior Court upon written appeal made within 30 15 days from the date the license suspension or revocation decision is issued. Such review shall be brought pursuant to 1 CMC §§ 91 12 and 17 91 13.

18 (h) Unless the Secretary of Finance provides otherwise, this section 13 shall not effect public health or alcoholic beverage control licensing."

20 Section 5. Authoritv to Make Inquiry. 4 CMC, Division 5 , Chapter 6 is 21 hereby amended to add a new section 5612 to read:

3 "§ 561 2 Authoritv to Make Inquiry. a) The Secretary of Finance is authorized to enter the premises of any establishment conducting business within the CNMI to make Page 5 PUBLIC LAW NO. 11-73 SENATE BILL NO. 11-96 1 any inquiry into the establishment's compliance with the business l. licensing requirements under this chapter. .-l b) The authority given to enter the premises under subsection (a) shall be carried out during normal business hours. If the s Secretary finds it is not practical to perform its duties during normal working hours, the action authorized under subsection (a) may be 7 carried out a t a n y reasonable hour as determined by the Secretary." Section 6. Penaltv for Violation of Business License Reuuirements. 0 4 CMC, Division 5 , Chapter 6 is hereby amended to add a new section 5613 to read: 10 561 3. Penaltv for Violation of Business License Requirements. 11 a) A n y person found operating or engaging i n a business to 12 sell merchandise, goods, or commodities, or providing services for 1 compensation without a valid business license shall be subject to a 1---i penalty of five hundred ($500) dollars and upon written notice to a 15 person under subsection (c) of this section, any continual violation 16 shall subject the person to a n additional penalty of one hundred ($100) 17 dollars per day for every additional day that the person is in violation 18 of the business license provisions. 10 b) The agency action provided for i n subsection (a) of this 20 section shall subject to the Administrative Procedure Act, 21 1 CMC *9101 et. seq. 3 c) The Secretary is hereby granted authority to issue a cease 23 and desist order to any person found in violation of the requirement to 1---i obtain a business license pursuant to 4 CM §5611(a). PUBLIC LAW NO. 11-73 SENATE BILL NO. 11-96

1 Section 7. Regulations. 4 CMC, Division 5, Chapter 6 is hereby amended to 7 add a new section 5614 to read: ,, .) "§ 5614. Regulations. The Secretary of Finance shall promulgate any -+ necessary rules and regulations necessary to carry out the intent of this act as it 5 relates to the duties conferred upon the Secretary of Finance." (i Section 8. Amendment. Definitions. 4 CMC § 5701 is hereby amended to 7 read :

8 "For purposes of this chapter: <) (a) 'Business license' means t h a t license required to engage in or 10 conduct business under 4 CMC § 561 1.

11 (b) 'Engaged in substantial construction or manufacturing' means:

12 (1) That manufacturing of textiles or textile products has 13 begun or will begin on or before the end of the fourth month following

14 May 28, 1996; and

15 (2) The applicant provides evidence of the required working capital (cash) in an amount of not less than $1,000,000 and proof of its 17 deposit in a Commonwealth banking institution; and 18 3) One of the following requirements:

10 (i) The applicant has executed a lease or leasehold 20 agreement or otherwise acquired an interest evidenced in 21 writing in real property within the Commonwealth for the 22 purpose of erecting thereon a facility for the manufacture of textiles or textile products; or 2-t (ii) The applicant has entered into a written contract(s) 2S for the construction (including prefabrication) of a facility to be Page 7 . ' PUBLIC LAW NO. 11-73 SENATE BILL NO. J..l.:M I utilized for the manufacture of textiles or textile products on 3 real property in t h e Commonwealth acquired for such purpose; 3 or

4 (iii) The applicant has purchased or executed 5 contract(s) for the purchase of necessary capital equipment designed for rind typically employed i n the manufacture of 7 textiles or textile products; or

8 (iv) The applicant has recruited or caused by binding 0 agreement to be recruited on its behalf at least 80 percent of 1() non-immigrant alien workers skilled in t h e manufacture of 11 textiles or textile products; or

11 (v) The applicant has made timely application to 1 permitting authorities of the Commonwealth government (e.g., 14 the Department of Environmental Quality, the Commonwealth

15 Utilities Corporation, or the Coastal Resources Management

1 Office) for any permits required by law to be issued as a 17 condition for the operation of a garment factory evidenced by a

18 Department of Finance receipt of payment of the applicable 1<) fees.

20 (c) 'Garment man ufac t u rer' means any sole proprietors hip, 21 partnership, corporation, firm, association, or other group or combination 11 engaged in the creation, production, or assembly of textiles or textile products 23 for purposes of export. Page 8 ,,' PUBLIC LAW NO. 11-73 SENATE BILL NO. 11-96

1 (d) 'Garment worker' means any person whose job title is listed under 2 the definition of garment industry in the Dictionary of Occupational Titles 3 published by the U.S. Secretary of Labor.

4 (e) 'Qualified garment manufacturer' means a garment manufacturer 5 engaged i n manufacturing textiles or textile products. (f) 'Quota of a manufacturer' means the number of non-immigrant 7 a 1 e n g a rme n t work e rs a 1 ow ed per g a rm e n t man u fact urer pur SU ant to 8 regulations i n effect prior to October 15, 1995.

9 (g) 'Textiles or textile products' includes all manmade fibers, tops, 10 yarn, piece goods, made-up articles, garments, and other textile manufactured 11 products which is made in whole or i n part from a n y natural or manmade 12 'I fiber, or blend thereof, that are classified under Part 6 of Schedule 3, Parts 1, 1 4,5 , 7 or 13 of Schedule 7, Part 1 of Schedule 8, or Part 1 of the Appendix to 14 the Tariff Schedules of the United States (19 U.S.C. § 1202)."

5 Section 9. Amendment. Prohibition on Issuance of New Licenses. 4 CMC § 10 5702 is hereby amended to read:

17 "Except as otherwise provided in this chapter, the Department of

18 Finance shall not issue or cause to be issued to any applicant a business 1') license for the purpose of garment manufacturing."

20 Section 10. Amendment. Restriction on Renewal of License. 4 CMC § 5703 21 is hereby amended to read:

22 "Notwithstanding a n y other provision of law, the Department of

23 Finance shall not renew or cause to be renewed to a n y applicant a business license for the purpose of garment manufacturing unless the applicant is a 25 qualified garment manufacturer and can show one of the following: Page 0 PUBLIC LAW NO. 11-73 SENATE BILL NO. 11-96 (a) That the applicant held a valid business license for the 2 purpose of garment manufacturing and was engaged in the .) ,) manufacturing of textiles or textile products prior to January 1, 1995; -+ or s (b) That the applicant was issued a valid business license for () the purpose of garment manufacturing between January 1, 1995, and

7 May 28, 1996, and t h a t the applicant was engaged i n substantial 8 construction or manufacturing on May 28, 1996." <) Section 11. Transfer of Full-time Equivalents. The Department of Commerce 10 shall transfer two full-time equivalents (FTE) and the associated personnel funding as 11 authorized by P.L. 11-41 to the Department of Finance for the purposes of 12 administering the issuance of business licenses as agreed by the respective 1,)' Secretaries. 1-+ Section 12. Severability. If any provision of this Act or the application of any 15 such provision to any person or circumstance should be held invalid by a court of 1() competent jurisdiction, the remainder of this Act or the application of its provisions to 17 persons or circumstances other than those to which it is held invalid shall not be 18 affected thereby. 1<) Section 13. Savin!!s Clause. This Act and any repealer contained herein shall 20 not be construed as affecting any existing right acquired under contract or acquired 11 under statutes repealed or a n y rule, regulation or order adopted under the statutes.

22 Repealers contained in this Act shall not affect any proceeding instituted under or _ , )' ') pursuant to prior law. The enactment of this Act shall not have the effect of 1-+ terminating, or in any way modifying, a n y liability, civil or criminal, which shall 25 already be in existence at the date this Act becomes effective. Page.: 1 0 . PUBLIC LAW NO. 11-73 I SENATE BILL NO. 11-96 ,I !!

1 Section 14. Effective Date. This Act shall take effect upon its approval by the 2 , Governor or its becoming law without such approval. RESIDENT OF THE SENATE SENATE LEGISLATIVE SECRETARY this day of , 1999. PEDRO COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS , I’agc 1 1