Commonwealth Development Authority Act of 1984 (P.L. 4-49)

I 0 The Honorable Vicente M. Sablan Speaker, House of Representatives Fourth Northern Marianas and Saipan, 96950 .. The Honorable C. President of the Senate Fourth Northern Marianas 96950 Legislature Speaker and Mr. President: Please be advised that I have signed into law House Bill 136, H.D.l, S.D.2 entitled establish the Development Authority; providing for its powers and duties, providing for its capitalization and operation; an obligation of regular reporting by the Authority; and for other purposes." This bill Public Law 4-49. In the process of reviewing this several concerns were raised which should be addressed by the Legislature as soon as possible. They include, but are not limited to the 1) Representation on the should be reconsidered so that all of our islands are adequately and fairly represented; 2) the provisions requiring bonding of the Board and certain officers of the Economic Authority could prove very costly to the It has been that the annual could well exceed two hundred thousand dollars; 3) no provision is for transferring current employees of the Economic to the new entity. should be amended to guarantee continuous to these individuals who desire to provide their services; 4) the constitu tionality of Section has been questioned by various and this issue should be thoroughly reviewed. The law 1,, () " ~ D I) 0 0 ([ommontuealtb of tbt Jl~r'tbtm jflartana Jfslanbs C!&fftct of tbt @obtrnor J&aipan, Jllariana ,lslands 96950 M;.r l 1 1985 J!Jmu,:6407/64DB/65B1 iiJrlex: 783-622 ~1111. NtlJ Cormonwealth legislature CM Corrrronwealth Saipan, CM Cear Mr. Ponciano Rasa \; v· Number Camonwealth l?l..Ul?)S8 S / irrqx>s ing becorres measure, Board ot rrerobers CornronwBalth Ceveloprent Corrrronwealth. premiLnu made Ceveloprrent I.Dan Fund errployrrent tolla,.,,ing: esti.rrated 13 (c) corrrrentators ..r/Jt l8'r ~ ..z:o-rPM. In spite of these reservations, I have signed the measure into law, as I feel that t h i s measure w i l l enhance the d e v e l o p s t of our islands' infrastructure, economic d e v e l o p s t , and provide to local people. I would, however, respectfully request that the leadership of the Legislature review the concerns raised and the Act accordingly. Copies of Public Law 4-49 are enclosed for your ready reference. Sincerely, Special Assistant for Programs and Legislative Review • CC: \ .. prarote errployment opportunities arrend . . I . 136, H . D . l , S.D.2 FOURTH NORTHERN MARIANAS COMMONWEALTH LEGISLATURE SIXTH REGULAR SESSION, 1985 AN ACT To establish the Commonwealth Development Authori ty; providing for i t s purposes, powers and duties, providing f o r i t s c a p i t a l i z a t i o n and opera t ion ; imposing an o b l i g a t i o n of r e g u l a r repor t ing by the Authori ty; and f o r o t h e r purposes. Offered by Representa t ives Juan T. Guerrero, Gregorio C. Sablan, Vic tor B. Pedro R. Guerrero, Juan S. Torres, Jose R. , Jose C. Cabrera, Vicente M. Sablan, M. Sablan, Juan B. Tudela, Pedro T. Nakatsukasa, Francisco T. Cabrera, and Benigno R. F i t i a l Date: J u l y 10, 1984 House Action Referred t o : Standing Committee Report No. 4-38 First and Second Reading: October 11, 1984 Final Readi ng : April 23, 1985 Committee on Resources and Development Senate Action Referred t o : Committee on Resources, Economic Development and Programs Standing Committee Report No. 4-128 . i r s t Reading: February 6, 1985 Second Reading: April 17, 1985 House o f R r e s e n t a t i v e s .. ... Hocog, .. '· .;.5j ~~ ·r ;' . . , -H ~Ji. NO .,· :~ j,? ... ... 1 1 .;, Lifoifoi Beniqno Chief Clerk of R re PUBLIC LAW NO. 4-49 FOURTH NORTHERN MARIANAS COMMONWEALTH LEGISLATURE HOUSE BILL NO. 136, H . D . l , S.D.2 SECOND REGULAR SESSION, 1984 AN ACT To establish the Canmonwealth Development Authority; providing for i t s purposes, powers and duties, prov id ing for i t s capitalization and operation; imposing an obligation of regular reporting by the Authority; and for other purposes. BE IT ENACTED BY THE FOURTH NORTHERN MARIANAS 1 Section 1. Short Title. T h i s Act may be 2 Development Authority Act of 1984. d EALTH LEG IS LATURE : ed as the Commonwealth 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Section 2. Development Authority: Banking and Corporation Divisions. The functions of the Authority shall be carried ou t t h r o u g h a Development Banking Division and a Development Corporation Division. Subject t o the provisions of this Act, the Banking Division generally shall be engaged in and public sector activities and the Corporation generally shall be engaged in private sector activities. Section 3. Purpose. The purposes of the Authority i s t o stimulate the economic development of the Northern Mariana ands. ( a ) The purposes of the Development Banking Division of the Authority shall be: (1) To receive and hold economic United States assistance for economic development loan provided by Section o f the Covenant; ( 2 ) To a i d i n the financing of capital improvement projects and other projects undertaken by the Commonwealth and i t s autonanous agencies; (3) To achieve the greatest possible return, in terms of economic development, on the COrlMONI ci goverrment Is 1 702(c) public H . B . NO. 136, S.D.2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 funds made avai lable t o the Commonwealth by the United States i n accordance wi th the Covenant; and on such other funds as may be made avai lable t o the Authori ty as cap i ta l contr ibutions; (4) To disseminate modern practices and techniques o f f inancing, management, and business administrat ion i n order t o ra ise the leve ls o f e f f i c iency and p roduc t i v i t y i n a l l sectors. (5 ) To serve as the Northern Marianas development bank i d e n t i f i e d i n A r t i c l e I X , Section o f the Consti tut ion. (b) The purposes o f the Development Corporation Div is ion o f the Author i ty sha l l be: ( 1 ) To iden t i f y , formulate, i n i t i a t e , st imulate and f a c i l i t a t e business and commercial enterprises, wi th special emphasis on agr icul t u ra l and marine resources, manufacturing and processing ac t v i t ies , import subst i tut ion, export development, and responsible use o f indigenous raw mater ia l s; (2) t o ident i fy , formulate, i n i t i a t e , stimulate, and f a c i l i t a t e business and commercial enterprises where a service necessary and v i t a l t o economic development i s required, o r where p r o f i t incentives are not s u f f i c i e n t t o a t t r a c t p r i va te sector investor; and Page 2 • H.D.1, 6(c) H.B. 136, H.D.l, S.D.2 1 2 3 4 5 6 7 0 9 10 11 12 13 14 15 16 17 10 19 20 21 22 23 24 25 (2) To serve as the economic development loan fund agency f o r qua l i f i ed pr ivate sector enterprises. Section 4. Def in i t ions. As used i n t h i s Act: (a) "Administrat ive expenses" means the cost o f reimbursements t o Board members, o f f i c e r s and s t a f f f o r wages, sa lar ies and other compensation authorized i n t h i s Act, and also means rent, o f f i c e expenses, professional fees and other necessary administrat ive costs o f implementing t h i s Act. (b) means any agency o r ins t rumenta l i ty o f the Government o f the Northern Mariana Islands including any government corporation as defined i n 1 Section (c) "Authori ty" means the Comnonweal t h Development Author i ty establ ished by Section 5 o f t h i s Act; (d) "Board" means the Board o f Directors o f the Author i ty as established by Section 7 o f t h i s Act; (e) "Commercial bank" means any banking i n s t i t u t i o n including c r e d i t unions o r branch o f any foreign o r domestic banking i n s t i t u t i o n t ha t now operates i n the Northern Mariana Islands, o r t h a t such operations a t some fu tu re time; ( f) "Consumer Loans" means loans f o r the acqu is i t i on o r use o f consumer products. Page 3 • I • . ' ' ' . ' i, , . ~ No. 11 Auton001ous public agency" auton001ous CMC 7103(n). COl111lences H.B. NO. 136, H . D . l , S.D.2 1 2 3 4 5 6 7 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 "Consti tut ion" means the Const i tut ion o f the Commonwealth o f the Northern Mariana Is (h) "Covenant" means the Covenant Commonwealth o f the Northern Mariana Is Union w i t h the United States o f thereto (U.S. Public Law No. 94-241); ands; t o Establ ish a ands i n P o l i t i c a l and 1 amendments (i) (j) "EDLF" means Economic Development Loan Fund; "Executive Director" means the Executive Director of the Authority; (k) "Marianas Public Land Trust" means the t r u s t established i n A r t i c l e X I , Section 6 o f the Constitution; (1 ) igat ions" includes bonds, notes, evidence o f debt, guarantees, canmercial paper, 1 eases, 1 ease-purchase agreements, and a l l other contractual igat ions o f the Authority; (m) "Private Sector Account" means t h a t por t ion o f the Author i ty 's transactions deal ing w i th funding and development o f pro jec ts w i t h i n the p r i va te sector, and funded fran various sources, inc lud ing Section Covenant Funds; (n) Sector Account" means t h a t por t ion o f the Author i ty 's transactions deal ing w i th the f inancing o f publ ic pro jec ts and funded by various sources, including Section Covenant Funds; "Short Term Financing" means loans f o r less than 24 months; Page 4 ( . : • •: 0 C' :•• •,' • • ' ,, ,' ·. ', ' . ' . \ (g) Prnerica al 8 "Obl obl the· 702(c) 11 Public 702(b) {o) H.B. NO. 136 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 (p) "Technical assistance" includes d i r e c t grant funding f o r services which contr ibute t o the purposes o f t h i s Act bu t are expenditures o f the Author i ty and are not reimbursable; "Total cap i ta l " means the funds avai lable t o the Author i ty pursuant t o subsection (a) o f Section 9 o f t h i s Act; (r) "Total funds" means t o t a l cap i ta l plus any funds avai lable to the Author i ty pursuant t o subsection (b) o f Section 9 o f t h i s Act . Section 5. Charter o f the Authority. (a) There i s created as an autonomous publ ic agency o f the Commonwealth o f the Northern Mariana Islands, a body corporate t o be known as the Commonwealth Development Author i ty to serve those functions provided f o r i n A r t i c l e X I , Section o f the Const i tu t ion and such other purposes as t h i s Act establishes. (b) The existence o f the Author i ty sha l l be perpetual. (c) The Author i ty sha l l maintain i t s p r inc ipa l o f f i c e i n Saipan, and may es tab l ish such other o f f i c e s o r branches elsewhere as the Board deems necessary. (d) Subject t o the provisions o f t h i s Act, the Author i ty sha l l have a l l the r i g h t s and p r i v i l eges o f a corporation. Page 5 I.•: • ' ' ; '" ~ ... •. "'. H.D.1 S.0.2 (q) 6(c) H.B. NO. 136 H.D.l S.D.2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Section 6. Powers and Restrictions. ( a ) Subject t o any limitation set forth i n this Act, the Authority shall have those powers reasonably necessary and incidental t o the fulfillment of i ts purposes, inc lud ing bu t not limited to the powers: (1) t o design, adopt, alter, and use a corporate seal (2) t o prescribe, adopt, amend, and repeal bylaws consistent w i t h this Act governing the manner i n which i t s business will be conducted and i n which the obligations imposed on i t by law w i l be performed; (3) t o receive and hold funds from the Uni ted States the Government of the Commonwealth, the Marianas ic Land Trust, the Economic Development Loan Fund and any other sources; (4) t o sue and be sued i n i ts own corporate name; (5) t o acquire and hold any interest allowed by law i n any real or personal property, t ang ib le or intangible, i n connection w i t h the activities of the Authority and t o sel l , mortgage, or otherwise dispose of such interest; Page 6 .• ·. I. Gover1111ent Pub 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 2 1 22 23 24 25 26 (6) t o borrow money f ran any p r i va te o r publ ic source, w i th in the or the United States o r i n any other country; and t o give secur i ty i n connection wi th such borrowing; (7) t o make and issue bonds, notes o r other ob l igat ions i n furtherance the purposes o f t h i s Act including, bu t not l im i ted to, funding cap i ta l improvement projects o f the t h f o r sewers, power, water, roads, health f a c i l i t i e s , a i r and sea ports, and parks and recreat ion f a c i l i t ies; (8) t o make loans t o any autonomous publ ic agency f o r use i n any pro ject t ha t i n the judgment o f the Author i ty w i l l f u r ther the purposes o f t h i s Act; (9) t o guarantee the obl igat ions o f the Comnonweal t h o r i t s autonomous i c agencies, incurred t o fund any pro ject t h a t i n the judgment o f the Author i ty fur thers any purpose o f t h i s Act; (10) t o make loans t o a subsidiary pub l i c development corporation, f o r i t s use i n any way deemed by the Author i ty to be consistent w i th t h i s Act; (11) t o underwrite, purchase, own, s e l l , mortgage, o r otherwise dispose o f stocks, bonds, debentures, secur i t ies, o r other evidence o f indebtedness i n futherance o f the purpose o f t h i s Ac t ; Page 7 I ; H.B. No. 136, H.D.1, S.0.2 Carmonwealth of C011111onweal publ H.B. No. 136, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 (12) to invest prudently pursuant to Section the reserves and other funds o f the Authori ty no t cur rent ly needed f o r development a c t i v i t i e s or f o r 1 i q u i d i ty; (13) t o guarantee the obl igat ions o f p r iva te indiv iduals, corporations o r cooperatives; (14) t o make loans t o p r i va te individuals, corporations and cooperatives who are e l i g i b l e f o r loans under the special provisions reserving funds f o r farmers, fishermen, ag r i cu l tu ra l and marine cooperatives and housing f o r low famil ies, i n Section o f the Covenant; (15) t o make loans t o p r i va te individuals, corporations and cooperatives other than pursuant t o subsection o f t h i s Section but only the proceeds o f the sale o f tax exempt Indust r ia l Revenue Bonds, which bonds sha l l be secured by the p ro jec t o r investment financed o r such other guarantees and col l a t e r a l as may be required by the author i ty . (16) t o employ foreclosure proceedings authorized w i th in t h law where required t o pro tec t outstanding loans and investments o f the Authority; Page 8 .. . . 11( d) ' . , .. ' '. 702(c) \' ( . (a)(l4) Ccmnonweal H.D.1, S.0.2 incane with H.B. NO. 136, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 (17) t o make contracts and execute a l l instruments necessary o r i n the exercise of the powers o f the Authority; (18) t o pledge the f u l l f a i t h and c r e d i t o f the Commonwealth; (19) t o h i r e such employees as are necessary t o the operation o f the Author i ty as provided i n Section 17 o f t h i s Act, and t o engage the services of outside experts , advisors, and other contractors as necessary t o the f u l f i l l m e n t o f the purposes o f the Authority; (20) t o undertake such research as i s necessary o r desirable t o fur ther the purposes o f t h i s Act; (21) t o provide technical assistance, supervision, o r management counseling, and other services i n connection wi th the f inancing o f any p ro jec t o r undertaking; (22) t o par t i c ipa te w i th any other provider o f cap i ta l i n the f inancing o f any pro jec t o r other undertaking which fur thers the purpose o f t h i s Act; (23) t o set rates o f i n te res t and fees, as provided i n Section 12 o f t h i s Act, and t o c o l l e c t money due t o the Author i ty from any (24) by any potent ia l business i n te res t o r other provider o f cap i ta l ; t o ass is t investment i n the Comnonwealth Page 9 ... H.D.1. S.D.2 convenient sources; H.B. No. 136, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (25) t o as i t s agent any commercial bank o r publ ic agency to any bank loan program involving loans t o p r iva te persons, corporations o r cooperatives e l i g i b l e f o r loans from the funds reserved f o r fanners, fishermen agr icu l tu ra l and marine cooperatives and low income f a m i l y housing i n Section o f the Covenant; Provided, t ha t the to ta l amount o f such loans sha l l not exceed the amount f o r speci f ic purposes i n Section o f the Covenant; (26) t o engage as i t s agent any major f inancia l i n s t i t u t i o n t o a l l o r a pa r t o f t h i s Act, major f inanc ia l i n s t i t u t i o n means a f inancia l i n s t i t u t i o n w i th assets i n excess o f f i f t y m i l l i o n do l l a rs ($50,000,000); (27) t o ac t as f inanc ia l advisor and coordinator w i th respect t o any publ ic borrowing by the th, i t s departments , autonomous publ ic agencies, mun ic ipa l i t ies and publ ic corporations. Notwithstanding any other provis ion o f no bonds o r other debentures, may be issued or other publ ic indebtedness incurred, by the Commonweal t h o r any o r i t s departments , autonomous i c agencies, municipal i t i e s o r corporations including the Mariana Islands Housing Author i ty Page 10 law, publ , .. I • • engage au ton a-Rous 702(c) 702(c) eannarked 1mpl ement Canmonweal H.0.1, S.D.2 actn1n1ster H.B. No. 136, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 and the Por t Author i ty without the approval o f the Board o f the Development Authority; (28) t o fund bonds, notes o r o ther obl igat ions o f the United States o r any s tate o r p o l i t i c a l thereof, o r any U.S. possession or t e r r i t o r y , o r any o f the d i s t r i c t s o f the Trust Te r r i t o ry o f the Pac i f i c Islands or t h e i r successor governments, o r any corporation o f any o f these; (29) t o organize, establish, operate, o r own in te res t in, subsidiary corporations o r j o i n t ventures chartered under the laws o f the Commonwealth and doing business w i th in the Commonwealth; (30) t o establ ish the Development Corporation Div is ion as a subsidiary corporation o f the Author i ty by appointing three members of the Author i ty Board as the Board o f Directors of the Development Corporation and promulgating such re lated procedures and requirements as Wi l l e f fectuate such establ i n accordance w i th the purposes o f t h i s Act; (31) t o make mortgage loans, issue mortgage insurance, enter i n t o mortgage insurance Page 11 . '· . ' . I• , H.D.1, S.D.2 CoMonweal th Ccmnonwea1th subdfvision public fstrnent agreements H.B. 136, H . D . l , S.D.2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 2 1 22 23 24 25 26 w i t h H.U.D., or other agencies of the United States or Camonwealth or any private entl ty t o f a c i l i t a t e mortgage finance for residential purposes; and (32) to take such action as i s necessary and proper to operate the Authority, further its purposes, administer its loans, and oversee i ts other capi tal ou ays . (b ) The Authority shall not: (1) (2) be a depository for private savings; fund or loan funds for goverrment operations, except for i t s own operations as provided i n this (3) make, issue, guarantee or otherwise participate i n providing credit o r lending money for consumer loans; and (4) authorize, make o r issue any bond or debenture or other obligation involving i ts own funds, i n excess of $3,000,000 (three million dollars) for any particular making or issue, without first obtaining the approval of the majority of the members of each house of the legislature by jo in t resolution. Such approval shall not be subject to Article X, Section 3 of the Constitution. T h i s provision shall not apply t o obligations t o be paid direct ly by the United States or any o f i t s agencies. Page 12 . ' , ' ' ~ •· . ' {' . . ·, . . .' . \ •' . • Ho. SoverJWents, tl Act; H.B. NO. 136, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 consent I n i t i a l o f the Senate; the shal l not apply t o y, two members sha Section 7. Board o f Directors. (a) The a f f a i r s o f the Author i ty sha l l be governed and control led by a Board o f Directors, which shal l consis t o f seven members; (b) Members o f the Board shal l be appointed by the Governor o f the Northern Marianas with- the advice and prov is ion o f 1 CMC Section the canposit ion o f the Board. 1 serve a two year term, three members shal l serve a three year term and two members shal l serve a four year term the terms t o be selected by the drawing o f l o t s . a Board member a f t e r h i s o r i g ina l term, shal l serve a four year term. successive Each member replacing Any member may be reappointed t o serve (c) The Board membership sha l l consist o f U.S. c i t i zens o r U.S. nat ionals as defined i n Section 8 of the Schedule on Transi t ional Matters o f the Const i tut ion who have a t l eas t one year continuous residency i n the Commonwealth and who are domici les o f the Commonwealth as defined i n Section o f the Covenant, w i th a t l eas t two members representing Rota and a t l eas t two members representing Tinian. Board members sha l l be p r i va te ind iv iduals w i th knowledge and experience i n business, finance, banking, o r other economic a f fa i rs ; Page 13 " \' ,. H.D.1, S.D.2 2901{g) tenns; lOOS(e) H.B. No. 136, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Members of the Board, cons t i tu t ing a shal l e lec t a Chairman and Vice Chairman upon t h e i r f i r s t meeting fo l lowing Senate confirmation of a l l seven members. The and Vice Chairman shal l serve f o r a o f two years. Bi-annually, the Board shal l e lec t i t s Chairman and Vice The Chairman sha l l preside over the meetings o f the Board; (e) Quorum. A quorum f o r meetings and transact ing business shall be four vot ing members ac tua l l y present. The Chairman sha l l be and deemed a vot ing member f o r purposes o f establ ishing a meeting o r business quorum but shal l no t vote except t o break a t i e ; ( f ) Unless otherwise provided f o r i n t h i s Act, a l l decisions o f the Board shal l be made by a ma jo r i t y o f those members present and vot ing when a quorum i s present. A member of the Board i s unable t o attend a pa r t i cu la r meeting may designate i n wr i t i ng another Board as a l ternate t o at tend t h a t pa r t i cu la r meeting i n h i s place and may authorize i n w r i t i ng the a l ternate t o cast the absent member's vote upon any i t e m o f business noticed on the agenda f o r t h a t meeting. A designation may not be used t o establ ish a quorum. Meetings o f the Board. (1) Quarterly Meetings Required. The Board sha l l meet not less than once each quar ter a t a time and place designated a t l eas t 14 days i n advance by the Chairman. Page 14 ' I IL I' • I "'' \' ,, (d) Cha1nnan tenn counted who (g) H.D. 1, S.D.2 quorum, 1nwnediately Chai man. member previously H.B. No. 136, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (2) Other The Board or the Chairman may convene other meetings on 72 hours notice. (3) Open and Closed Meetings. Meetings sha l l be open t o the i c during discussion o f po l i c ies , procedures, and administrat ive and other non-confidential matters, and closed t o the i c during discussion o f personnel , and other matters o f a conf ident ia l nature as may be defined i n the bylaws. (h) Compensation o f Board Members. The members o f the Board shal l be compensated pursuant t o Section 8 o f Public Law 4-32 and may be reimbursed i n accordance w i th the Commonwealth law f o r any reasonable and necessary expenses incurred i n the performance o f t h e i r dut ies under t h i s Act . Rules and rates f o r t ravel and per diem rates shal l be the same as those established f o r the Executive Branch. (i) Resignation, Removal and Vacancies o f Board. An appointed member may a t any time resign h i s o f f i c e by not ice i n w r i t i n g t o the Upon resignation, removal o r exp i ra t ion o f the o f appointment the member sha l l cease t o s i t on the Board, and sha l l not be included i n a quorum count. Removal o f a Board member before the exp i ra t ion o f h i s term shal l occur only by the Page 15 ... .. ' . publ ,. : . \ 'I •. Meetings. publ Governor. tenn '· H.D.1, S.D.2 H.B. NO. 136, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 2 1 22 23 24 and on grounds o f gross neglect o r de re l i c t i on o f duty, breach o f f i duc ia ry duty, o f a felony o r mental o r physical incapacity. I n the event t h a t a Board member i s removed fran the Board o r ceases to s i t on the Board f o r any other reason, the Governor shal l appoint a replacement, w i th the advice and consent o f the Senate. Such a replacement member o f the Board shal l serve the remainder of the term o f the member he replaces and must be confirmed by the Senate to Section I n the event the Chairman or Vice Chairman are replaced, the Board w i l l select a Chairman o r Vice Chairman from among i t s members pursuant to subsection ( d ) . (j) Duties o f the Board. The Board sha l l have the fo l lowing duties: (1) to govern the operation o f the Author i ty i n a manner tha t fu r ther i t s purpose; (2) t o take act ion necessary t o the exercise by the Author i ty o f i t s powers under t h i s Act; (3 ) to adopt and to adhere t o operating po l i c i es tha t w i l l assure the Author i ty 's f inancia l v i t a l i t y and best promote i t s development purposes; Page 16 .. f I •• I • : ·,.' ' •. • ' •·1 H,0,1, S.D.2 Governor conviction pursuant lS(b). bylaws, H . B . NO. 136, S.D.2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 (4 ) t o reserve t o i t s e l f the f i n a l decision on loan appl icat ions and other proposals f o r Author i ty funding o f programs and projects; (5) t o oversee administrat ion o f a l l Author i ty loans and other fund al locations, and assure iance w i th provisions o f loan agreements; and ( 6 ) t o adopt a budget; (7) t o approve a repor t a t the end o f each f i s c a l year o f the Author i ty 's a c t i v i t i e s during the year, and submit the repor t t o the Governor and the Legislature. ( k ) Powers o f the Board. The Board shal l have the f o l 1 owing powers : ( 1 ) t o exercise on behal f o f the Author i ty a l l powers enumerated i n Section (6) and such addi t ional powers as are reasonably necessary and incidental t o the f u l f i l l m e n t o f i t s dut ies under Section o f t h i s Act; (2) t o employ o f f i c e r s and s t a f f o f the Author i ty and t o def ine t h e i r dut ies and to dismiss them, subject t o the l i m i t a t i o n s imposed by t h i s Act; Page 17 H.0.1, ccxnpl (7)(j) I . No. 136, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 16 17 18 19 20 21 22 23 24 25 (3) t o subject to the r e s t r i c t i o n o f t h i s Act, any use o f Author i ty funds, inc lud ing the power t o determine how the Author i ty 's cap i ta l shal l be maintained and managed; (4) t o a l locate and expend f o r the repayment o f obl igat ions incurred by the Author i ty i n accordance w i th Section 6 o f t h i s Act; (5) t o protect the investment o f the Author i ty through the of foreclosure pol i c i e s and procedures t h a t conform t o law and are conducive t o consistent n s t r a t i on; (6) t o review a l l loan appl icat ions and other f inanc ia l transactions o f the Authority. Except as s p e c i f i c a l l y authorized i n t h i s Act, only the Board shal l be capable o f author iz ing or approving the expenditure o r loan o f au thor i t y funds; (7) subject t o budgetary res t ra in t s t o contract and pay f o r economic studies, p ro jec t evaluations, f e a s i b i l i t y studies as deemed necessary and appropriate t o fu r ther the purposes o f t h i s Act; Page 18 H.B. H.D.1, S.D.2 detenn1ne, funds development admi 1 15 No. 136, H.O.l, S.D.2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (8) t o appoint from time t o time consist ing o f any three o r more d i rec to rs o r o f f i ce r s o f the Authority; and (9) t o delegate t o any o f i t s any o f i t s powers, except the power o f lending au thor i t y under t h i s Act may only be delegated t o the Development Corporation Division, i f the Author i ty es tab l ish the Development Corporation D iv is ion as a subsidiary corporation o f the Author i ty pursuant t o Section and t o a commercial bank engaged t o administer loans authorized by Section a) (14). t o which any powers are so delegated may exercise those powers i n the same manner and w i t h the same e f f e c t as i f they had been conferred on i t d i r e c t l y by t h i s Act. Any t t ee Section 8. Of f icers o f the Authori ty. (a ) The o f f i c e r s o f the Author i ty sha l l be an Executive Director, a Comptroller, and such other o f f i c e r s as the bylaws may requi re f o r the operation o f the Authori ty. (1) The Board sha l l appoint an Executive Director. The person so appointed sha l l be knowledgeable, and have a minimum o f f i v e years professional experience, i n banking procedures and a c t i v i t i e s , o r i n economic development and Page 19 H.B. carmi ttees carmi ttees ( 6 )(a)( 30) , 6( ccmni H.B. No. 136, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 2 1 22 23 24 25 26 financial and shall possess graduate degree i n business administration, accounting or law from an accredited university o r col 1 ege. (2 ) The Executive Director shall be the Chief Executive Officer of the Authority- and shall conduct and Oversee the Authority's general operations, including the administration of a l l loans and the enforcement of a l l provisions of loan agreements, investments and other transacti ons . (3) The Executive Director shall prepare an operating manual to implement the general operation and management pol ic ies , and development objectives and strategies established by the Board, including a l l internal administrative procedures, specific loan procedures, and other matters relevant t o the practical implementation of t h i s Act, which shall be approved by the Board. (4) The Executive Director shall refer to the Board for decision a l l loan applications from any el igible borrower under this and a l l other matters involving allocation of Authority funds except for such authority over operations funds as the Board may delegate to him. Page 20 H.D.1, S.D.Z management, eco-ncm,i cs, Act, 136, H . D . l , S.D.2 1 2 3 4 5 6 7 a 9 10 '1 1 12 13 14 15 16 17 18 19 20 2 1 22 23 24 25 (5 ) The Executive Director shall (A) monitor the progress financial s ta tus o f projects i n whole or i n part by the Authority; (B) report to the Board a t each Board meeting a s t o the ac t iv i t i es of the Authority; ( C ) prepare an annual report of the Authority's operations and ac t iv i t i es for each f iscal year w i t h i n 3 months of the close of f iscal year, including appropriate financial statements, and submit a d ra f t of such report t o the Board approval; (D) prepare the annual administrative budget for review and approval by the Board and for to the Governor and the Legi sl re; (E) hire such employees as the Board may delegate power to do so; (F) perform such other duties as the Board may require. ( b ) The Comptroller shall exercise the following functi ons : (1) keep the off ic ia l books and accounts of the Authority; Page 21 .··· -•} . .. H.B. No. and f1 nanced for 1nfomationa1 submission atl.J , . . H.B. No. 136, 1 2 3 4 5 6 7 a 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 (2) prepare an annual repor t o f the f inancia l condit ion o f the Author i ty f o r the Board; and (3) such other functions as the Executive Director or the Board may require. (c) The Comptroller shal l hold a t l eas t a bachelor's degree i n accounting and 5 years experience i n or f inancia l accounting. (d) The Executive Di rector and sha l l be paid a t sa lar ies established pursuant t o Section 7 o f Public Law 4-32. (e) The Executive Director, Comptroller and any other o f f i c e r o f the Author i ty may be dismissed f o r cause by the a f f i rmat ive vote o f f i v e Board members. (f) The Directors and o f f i c e r s sha l l , a t Author i ty expense, post personal f i duc ia ry bonds i n an amount o f not less than 150% o f the t o t a l assets o f the Author i ty a t the each assumes o f f i ce ; Provided, however, t h a t i n no event shal l the aggregate o f the bonds be less than t h i r t y m i l 1 i on dol 1 The premium f o r such bonds shal l not be considered an the purpose o f Section 9. Funds o f the Authority. (a) The funds avai lab le to the Author cap i ta l shal l consis t o f the fol lowing: i ve expense f o r ty as paid- in (1) a l l United States economic assistance Page 22 time H.D.1, S.D.2 perfonn gover1111ental Canptroller amount ars ($30,000,000). administra § lO(f). H.B. No. 136, H.D.l, S.D.2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 f o r econanic development loans provided by A r t i c l e V I I , Section o f the Covenant, received by the Commonwealth on o r a f t e r the e f f ec t i ve date o f t h i s Act; (2) any amount provided t o the Author i ty by the Marianas Public Land Trust pursuant t o A r t i c l e X I , Section of the Consti tut ion; Provided, that the amount w i l l be repaid t o the Trust when required by the Const i tut ion pursuant t o arrangements between the Trust and the Authority; (3) a l l cash, deposits, c e r t i f i c a t e s o f deposit, treasury igat ions and other cash assets transferred o r accruing t o the Author i ty pursuant t o Section (15) o f t h i s Act, and any addi t ional funds t o which the Commonwealth i s o r becanes en t i t l ed as a r e s u l t o f the separation o r o f any Development Loan Fund program administered p r i o r t o the e f fec t ive date o f the Covenant by the Government o f the Trust Te r r i t o r y o f the Paci f ic Islands, o r by the Government o f the Northern Mariana Islands; (4) any amount as may be provided by the Legislature annually f ran funds made avai lable' t o the Commonwealth under Section o f the Covenant o r f ran any other source; and Page 23 702(c), 6(c) obl tennination Econanic 702(b) H.B. NO. 136, H.D 1, S.D.2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 2 1 22 23 24 25 any amount which might be granted, donated, or appropriated to the Authority by the Federal Government or any other source. ( b ) Other funds available to the Authority shall incl ude the fol 1 owing : (1) any earned interest, surplus or net p ro f i t from Authority operations and ac t iv i t ies ; (2) any amount the Authority may borrow from any foreign or domestic public or private sources; (3) any interest or fees due or received items transferred to the Authority by the Economic Development Loan Fund; (4) al l notes, accounts receivable, fixed assets and other assets transferred from the EDLF or any other enti ty; and (5) any assets or amounts made available for any use by the Authority. Section 10. General Management ines. ( a ) The Board shall formulate operational plans, policies, and procedures to implement the provisions of this Act. Plans, policies or procedures, other statements required by this section, the bylaw, the operating manual, and any similar of the Board shall be subject to 1 CMC Sections 9102 and 9105. Page 24 ., •... j • (5) fran governnental Gu idel determinations H.B. 136, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 19 21 22 23 25 (b) Subject t o the approval o f the Governor, and the Legislature the Board shal l adopt and update as necessary, a statement o f development object ives and p r i o r i t ies . (c) The Board shal l adopt and publish, and update as necessary, a statement o f -s t ra teg ic plans t o achieve the object ives stated pursuant t o subsection (b) o f t h i s section which shal l be designed i n consideration o f the long-term contr ibut ion o f the Author i ty t o such objectives rather than the o r maximum f inancia l re tu rn to the Authority. (d ) Notwithstanding any other provis ion o f law, the Author i ty and i t s d iv is ions shal l use the accrual method o f accounting and the Generally Accepted Accounting Pr inc ip les Separate accounting systems shal l be used and maintained f o r the o f the Development Corporation D iv is ion including economic development loan fund a c t i v i t i e s and the t ng v i sion . (e) The Board sha l l establ ish and maintain e f f e c t i v e w i th 1 appropriate governmental agencies i n i t s aim to fu r ther the purposes o f the Author i ty and t o ensure t h a t the e f f o r t o f the Author i ty do not dupl icate the e f f o r t s o f other e n t i t i e s o f the t h Government. Page 25 No. H.D.1, S.D.2 1nned1ate (6AAP). functions 18 Oevelopmen Bank1 D1 cam,un1cat1ons al ColTlnonweal H.B. No. 136, 1 2 3 4 5 6 7 0 9 10 11 12 13 14 15 16 17 10 19 20 21 22 23 24 25 The Author i ty sha l l pay i t s administrat ive expenses out o f the avai lable to the Author i ty pursuant to Section and (3) and i n conformity w i th a budget, prepared and submitted to the Governor and the Legis la ture as provided i n 1 CMC Div is ion 7, f o r purposes. The budget f o r administrat ion sha l l not exceed two percent o f the Author i ty 's assets including accounts receivable. The Author i ty sha l l fund technical assistance authorized pursuant t o Section a) and econanic studies, p ro jec t evaluations and f e a s i b i l i t y studies authorized pursuant t o Section out o f funds avai lab le t o the Author i ty pursuant to Section and ( 3 ) and i n conformity with a budget prepared and submitted t o the Governor and the Legis la ture f o r informational purposes as provided i n D iv is ion 7. The budget t o fund t h i s shal l not exceed one percent o f the Author i ty 's assets inc lud ing receivable . (h) The Author i ty sha l l pay i t s non-administrative obl igat ions out o f the funds avai lab le t o the Author i ty and sha l l repor t a l l such expenses i n the annual report. (i) The Author i ty shal l not accept deposits, but may hold evidence o f deposits, o r otherwise accept contro l o f deposits, i n other f inanc ia l i n s t i t u t i o n s . Page 26 (f} 1nfonnational ( g) funds 9(b)(l) part H.D.l, S.0.2 6( (21), 7(k)(7), 9(b)(l) l CMC accounts H.B. 136, H.D.l, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 19 20 21 22 23 24 25 26 The Authority sha l l not provide short-term financing, except as necessary i n medium or long-term assistance by the Authority, (k) The Author i ty shal l not otherwise the pr iva te f inanc ia l i n s t i t u t i o n s o f the Commonwealth, except t ha t the Author i ty may provide a n c i l l a r y services to a c l i en t , i n connection w i th a loan or other f inancing a c t i v i t i e s by the Authority, when i t would not be pract ica l f o r such services t o be provided by another f inancia l i n s t i t u t i o n . (1) The Author i ty sha l l make, guarantee, o r par t i c ipa te i n pr iva te sector loans or other f inancing only i f the Board i s sa t i s f i ed tha t under prevai l ing market condit ions the borrower being financed would be unable t o obtain f inancing from a commercial bank or other f i nanc ia l i n s t i t u t i o n s under condit ions which i n the o f the Author i ty are reasonable fo r the borrower. (m) The Author i ty defer the exercise o f any general power included i n Section 6 o f t h i s Act u n t i l such time as i t i s sa t i s f i ed i t has the management capabi l i ty , and understanding and experience o f the economy and i t s investment potent ia l and climate, i t s corporate and cap i ta l market structure, and other aspects, o f implementing t h i s t o e f f e c t i v e l y and prudently execute such powers. Page 27 S.D.2 (j) connection -1th cc.npete w1 th such detennination 18 may kt No. 136, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (n) The f i s c a l year o f the Author i ty sha l l be ident ica l with f i s c a l year o f the Section 11. Financial Prudence. (a) The Author i ty shal l engage i n prudent management o f a l l i t s assets. (b) The Author i ty shal l maintain such reserves o f cash o r other assets as are necessary and prudent t o assure t h a t the Author i ty w i l l be able t o meet i t s igat ions i n a t imely manner, inc lud ing consideration o f loan o r other guarantees issued by the Author i ty which could eventually r e s u l t i n an ob l iga t ion o f the Authority. ( c ) The Author i ty sha l l maintain s u f f i c i e n t l i q u i d assets t o be able t o meet normal operating expenses and d i i t s short-term 1 i a b i l t i e s and current matur i t ies o f any indebtedness o f the Authority. (d) Reserves and other funds o f the Author i ty no t cur ren t ly needed f o r development a c t i v i t i e s o r 1 i q u i d i t y shal l be reinvested by the Author i ty t o the extent permitted by law, i n Securi t ies which mature not l a t e r than the date on which the money on deposit i n such funds w i l l be needed f o r the purposes o f such funds. Investment-Securities are defined t o mean the fol lowing: (1) d i r e c t general ob l igat ions o f the United States o f h e r i c a ( including igat ions Page 28 ' .' ' J( H.B. H.D.1, S.D.2 the C<JllftOnwealth. financial obl scharge i long-tenn Investment obl H.B. 136, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 2 1 22 23 24 issued or held i n book entry on the books of the o f the Treasury o f the United States of h e r (2) obligations on which the payment of the principal and interest is unconditionally guaranteed by the United States o f (3) direct and general obligations of any s t a t e w i t h i n the United States of or any pol t ica l subdivision thereof, provided tha t a t the of purchase such obligations are rated i n e i ther of the two highest rating categories by a nationally recognized bond rating agency; (4) bonds, debentures, participation cer t i f ica tes , notes or other evidence of indebtedness payable i n cash and by any one or a combination of any of the Federal Land Banks, Federal Loan Banks, Federal Intermediate Credit Banks, Export-Import Bank of the United States, Farmers Administration, or Mortgage Association, o r any other agency or corporation which has been or may hereafter be created by or pursuant t o an Act of the Congress of the United States a s an agency or instrumental i ty thereof; Page 29 Department ica); time .,, . Home Goverl'fnent National No. H.D.1, S.D.2 fon:n P(nerica; finerica hsued Home H.B. 136, 1 2 3 4 5 6 7 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (5) deposits which are ful ly insured by the Federal Deposit Insurance Corporation, the Federal Savings and Loan Insurance Corporation; the National Credit Union Share Insurance Fund or any other federal deposit insurance program; (6) negotiable or non-negotiable certificates of deposits or other similar banking arrangements issued by any bank or trust company whose negotiable or non-negotiabl e certificates of deposit, time deposits or other similar banking arrangements are rated a t the time of their issuance i n either of the two highest ra t ing categories by a nationally recognized rating agency; and (7) repurchase agreements w i t h any inst i tut ion whose deb t securities are rated a t least "A" (or equivalent ra t ing of short term obligations if the investment is for a period not exceeding one year) by Standard Poor's Corporation or secured as to principal a t 103% of market value i f the debt securities are rated and a t market value i f the debt securities listed i n subsection (1) of this Section. Section 12. Interest Rates. In setting interest rates for loans for various types o f projects and undertakings, the Authority shall Page 30 J ·, No. H.D.1, S.0.2 136, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 2 1 22 23 24 25 consider the cost and opportunity cos t o f cap i ta l , i t s administrat ive expenses i n r e l a t i o n such loans, overal l p reva i l ing market rates, and the r i s k o f i n f l a t i o n . The Author i ty may set concessional i n te res t rates f o r pro jects and other undertakings which serve p a r t i c u l a r needs as determined by the Authority, but w i th due regard for the overa l l need o f the Author i ty t o cover i t s costs, Section 13. by the Authority. (a) (1) The Authori ty may bonds, debentures, secur i t ies, notes, co l l a te ra l s, and other igations, a t such rates and with such matur i t ies as may be s t ipu lated therein, and upon secur i ty as may be appropriate to the type o f ob l igat ion as determined by the Authority. Such obl igat ions shal l be redeemable a t the opt ion o f the Author i ty a t or before matur i t y i n such manner as may s t ipu la ted therein. (2) The Author i ty may borrow funds f ran any publ ic o r p r iva te lending i n s t i t u t i o n or other source under such terms and conditions, and w i th such security, as may be acceptable t o part ies. (b) Except when the f inancing has a se l f - su f f i c i en t revenue base, the t o t a l debt o f the Author i ty shal l not exceed three times i t s t o t a l cap i ta l durlng any i n i t i a l p a r t i a l f i s c a l year and the f i r s t f u l l f i s c a l year o f i t s operation. I n each succeeding f i s c a l year, the r a t i o o f Page 31 .. ' > • '... . .. , . ,. . ·:~ . H.B. Ho. H.D.1 1 S.D.2 own to socio-econanic Borrowing 1 ssue obl be H.B. NO. 136, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 2 1 22 23 24 25 debt to equity may be increased by one, until a ra t io of five t o one has been The debt-to-capital restrictions i n this part shall not apply t o obligations backed by the bull f a i t h and credit of the United States or t o obligations paid directly or indirectly by the United States or any of i t s agencies. (c) The Authority may borrow only up t o one million dol la rs for periods of not more than s ixty 60 days for operating purposes. Section 14. Project Supervision. (a) The Authority may a t i t s discretion provide project guidance t o any undertaking financed entirely or i n part by the Authority through periodic visits by Authority staff and through regular flow of reports fran the borrower o f other persons receiving such assistance. (b) When i t appears that a project or undertaking financed by the Authority may be less than viable, the Authority shall attempt t o help overcome such difficulties, if i t t h a t such help is likely t o be effective. Such help may include rescheduling ob any obligation, additional financial assistance, strengthening o f management, revision of government constraints on the success of such project or undertaking, removal of technical deficiences i n any process, and marketing advice or assistance. The Authority when necessary and Page 32 1 ' r' ~ " . . , ' H.D.l, S.D.2 inaxi run reach&<!, determines H.B. NO. 136, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 appropriate t o preserve the Author i ty 's investment shall take physical control o f the or undertaking, i n such manner i t deems adequate. (c ) Fees be charged o r f o r any assistance o r help rendered under t h i s section, as the Authority f inds appropriate under the Section 15. Economic Loan Fund. (a) Northern Marianas economic development loan fund sha l l be managed and administered by the Author i ty i n accordance w i th the provisions o f t h i s Act. (b) The Northern Marianas Economic Development Loan Fund Board shal l be dissolved no t l a t e r than 60 days a f t e r the f i r s t meeting o f the Board o f Directors o f the Author i ty and the Fund w i l l cease t o e x i s t as a separate en t i t y . A l l functions, powers, dut ies, funds, contracts, igations, assets, and 1 i a b i l i t i e s o f the Northern Marianas Economic Development Loan Fund ex is t ing p r i o r to the e f f e c t i v e date o f t h i s Act sha l l be transferred to the Author i ty no t l a t e r than 60 days a f t e r the f i r s t meeting o f the Board o f Directors o f the Author i ty. (c) Loans, guarantees, 1 i a b i l i t i e s , and igat ions transferred t o the Author i ty pursuant t o Subsection (b) o f t h i s section shal l be accounted f o r separately other transactions o f the Author i ty u n t i l paid, l iquidated, o r discharged. money so transferred and a l l Page 33 obl may project waived c i rcl.111s tances. Oevleopment Unc01t111i tted H.D.l, S.D.2 ob1 fran , H.B. NO. 136, H . D . l , S . D . 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 repayments of outstanding loans will be treated as paid in-capital of the Authority. All interest or fees due or received in connection w i t h any item transferred pursuant to this section shall be available to the Authority purusant to Section ( d ) The Authority shall ensure t h a t the funds required to be reserved each year for loans t o private individuals, corporations , and cooperatives for farmers , fishermen, agricul tural and marine cooperatives and low interest housing under Section of the Covenant are available for that purpose. Section 16. Confl icts of Interest. (a ) No member of the Board, officer, counsel, agent, or employee of the Authority shall i n any manner, directly or indirectly, participate in the deliberation or upon the determination of any question affecting his persona interest or the interests of any enterprise i n which he or his parent, spouse, son, daughter, brother, sister, mother-in-law, father-in-law, sister-in-law, brother-in-1 aw or any member of his household i s directly or indirectly interested . ( b ) No loan or other financial assistance shall be extended by the Authority t o any enterprise i n which any member of the Board, or the Executive Director, o r any parent, spouse, son, daughter, brother, sister, Page 34 9(b). 702(c) 136, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 aw, f a ther- in-1 aw, sister- in- law, brother- in-law, o r any member o f h i s household has any d i r e c t pecuniary in terest , as defined by the Board i n the (c) The r e s t r i c t i o n s o f subsection (a) and (b) o f t h i s section shal l no t apply to publ ic sector assistance. (d) No fee, commission, g i f t , o r charge o f any k ind shal l be exacted o r demanded by o r paid t o any person mentioned i n subsection (a) o f t h i s section, f o r obtaining a loan o r other f inanc ia l assistance. (e) A w i l l f u l f a i l u r e t o disclose a c o n f l i c t o f i n te res t as defined i n t h i s Section, shal l be a breach o f f ud i c ia ry duty and cause f o r by the appointing author i ty . Section 17. Staf f . (a) Subject t o the provis ions o f section, the Executive Di rector may h i r e no more than 15 employees f o r those t ions t h a t the Board may s p e c i f i c a l l y provide for ; Provided, t ha t where feas ib le and available, the Author i ty sha l l r e l y on agencies o f the t h Government f o r s t a f f and professional support t o the extent t ha t such re l iance poses no th rea t o f c o n f l i c t o f i n te res t o r appearance o f impropriety. (b) The s t a f f o f the Author i ty sha l l have the necessary expert ise i n the various aspects o f development, Page 35 l ' L • H.B. No, H.0.1, S.D.2 mother-1n-1 bylaws. i11111ediate removal this pos1 Commonweal H.B. No. 136, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 banking, p a r t i c u l a r l y i n the f i e l d s o f analysis, engineering, economics , and techniques. (c) Professional employees o f the sha l l not be subject t o appl icable C i v i l Service laws and regulations. A l l employees other than the Secretary o f the Executive Director sha l l be wi th in the c i v i l service system. (2) The Executive Di rector shal l g ive f i r s t preference i n employment to workers residing i n the Camonwealth. (3) When necessary t o assure the recruitment o f professional employees s u f f i c i e n t l y knowledgeable and competent to e f f e c t i v e l y carry out the purpose o f the Author i ty professional employees may be h i red by contract without regard to the general schedule o f pay l eve l s se t by law. Section 18. o f Board: Transit ion. (a) The i n i t i a l Board o f Directors sha l l be appointed by the Governor, pursuant t o Section o f t h i s Act, w i th in 45 days o f the e f f e c t i v e date o f t h i s Act. The Senate shal l exercise i t s confirmation au thor l t y over the Governor's appointees no l a t e r than 45 days a f t e r each i s submitted f o r confinnation. I f the Senate f a i l s to Page 36 4 marketing, (1) non-professional Confirmation f1n•ncia1 Btanagement H.D.1, S.D.2 hlthor1ty 7(b) . , . H.B. NO. 136, H.D.l, S.D.2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 19 20 21 22 23 24 25 exercise i t s confirmation author i ty within the days, such time the appointee sha l l be deemed t o have been rejected by the Senate. However, notwithstanding any prov is ion o f law t o the contrary, the Governor may appoint new ind iv idua ls t o the i n i t i a l Board, o r may reappoint the same s o r ig ina l l y appointed. (b) Appointments and confirmations f o r vacancies a f t e r the i n i t i a l Board has been establ ished sha l l be i n the manner provided by 1 CMC Div. 2, Par t 2, except as otherwise provided by t h i s Act; Provided, t h a t a f t e r the 90 day period f o r has expired and the appointee appoint ear l i e r o r appointees are deemed rejected, the Governor may new ind iv idua ls f o r confirmation, o r re-appoint h i s appointee o r appointees. Section 19. Privacy o f Information. No member o f o f f i ce r , counsel, agent, o r employee o f the Author i ty who becanes p r i vy t o any propr ie tary information as a r e s u l t o f h i s o f f i c i a l pos i t i on wi th the Author i ty sha l l reveal such information t o any person outside the course o f h i s o f f i c i a l duties, nor sha l l he use such information f o r h i s own personal gain. Section 20. C i v i l and Criminal Penalties. (a) Criminal Penalties. Any member o f the Board, or any o f f i c e r , employee, counsel, o r agent o f the Author i ty o r any other person who embezzles, abstracts, or w i l l f u l l y misapplies any money, funds, c red i t , o r secur i t i es o f the Page 37 ) . individual confi nnation the Boar< , 18 . H.B. 136, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Authority, o r who wi l l fu l ly makes any fa l se entry i n any book, report, o r o f the Authority, o r who w i l l f u l l y any other ac t w i th i n t e n t to in ju re o r defraud the Authority, o r who v io la tes Section 19 o f t h i s Act, or who accepts any consideration which re lates to h i s dut ies under t h i s Act, except as provided for, or any ind iv idual who, w i th l i k e in ten t , conspires with, aids, o r abets any person i n any v i o l a t i o n o f t h i s section, shal l upon convict ion be f ined not more than $2,000 or imprisoned f o r not more than 5 years, o r both. (b) C i v i l Penalties. Conviction o f any act ion described i n subsection (a) o f t h i s section, o r any felony or any crime o r offense involv ing personal dishonesty, o r par t i c ipa t ing i n any conduct t h a t threatens the safety and soundness o f the Authority, sha l l r e s u l t i n the prompt removal o f such Board members, o f f i c e r s o r employees and such person shal l not be reinstated, o r employed i n any capacity and shal l be c i v i l l y l i a b l e f o r any losses t h e i r caused the Authority. Section 21. Legal Relationships. (a) The Author i ty and a l l i t s property, transactions, and income shal l be exempted from a l l taxes and other lev ies i n the nature o f taxes o f the Commonwealth o r any loca l thereof. t o any pr iva te enterpr ise i n which the Author i ty has an in terest , except a wholly-owned subsidiary o f the Authority. This exemption shal l no t apply Page 38 • I : \ No. H.D.1, S.0.2 statement ccmmits actions goverl'lllent H.B. 136, S.D.2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 (b) received by any person bonds o r other ob l igat ions o f the Author i ty sha l l be taxat ion by the Commonwealth o r any loca l government thereof, and by the United States, or by any State, Te r r i t o ry or possession o f the United States or any p o l i t i c a l subdivision o f any of them as provided by Section o f the Covenant (U.S. Public Law (c) The r i g h t s t o funds al located or t o any borrower receiving f inanc ia l assistance fran the Author i ty but no t d is t r ibu ted t o such borrower, sha l l be beyond claims o f c red i to rs o f such borrower. (d) Bonds o r other ob l igat ions o f the Author i ty sha l l be lawful investments, and may be accepted as secur i ty f o r any f iduc iary , t rus t , o r publ ic fund, the investment o r deposit o f which i s under the author i ty, control , o r supervision o f the Commonwealth o r any agency or inst rumenta l i ty thereof, including the Commonwealth Treasury. Section 22. The Public Auditor shal l aud i t the operations, books, and records o f the Author i ty a t l eas t annually and i n accordance w i th 1 CMC Section and Public Law 3-91. repor t o f the audi t shal l be transmitted t o the Executive Director, the Board, the Governor, and the -Legislature. does no t complete an annual aud i t w i th in 3 months o f the close o f the f i s c a l year, the Author i ty sha l l immediately engage a c e r t i f i e d publ ic accountant f o r t h a t purpose. The I f the Public Auditor Page 39 , . ' •.. . •. ' ' . l • • Incane 94-241). 607(a) 7710(a) Ho. frQll exempt fran H.0.1, canmitted No. 136, 1 Section 23. Vacation o f Executive Order. Trust T e r r i t o r y 2 3 4 5 6 7 9 10 11 Administrat ive D i rec t ive Order No. i s vacated no l a t e r than 60 days a f t e r the establ istwnent o f the Author i ty 's Board o f Directors. Section 24. Severabi l i ty. I f any provision o f t h i s Act, o r the appl icat ion o f any such provis ion t o any person or circumstance, sha l l be held i n v a l i d cour t o f canpetent j u r i sd i c t i on , the remainder o f t h i s Act, o r the appl icat ion o f such provis ion to persons o r circumstances other than those t o which i t i s held inva l id , sha l l no t be affected thereby. Section 24. E f fec t ive Date. This Act sha l l take e f f e c t upon i t s approval by the Governor, o r upon i t s law without such approval. I n Pedro P. Governor Commonwealth o f the Northern Islands Page 40 l l • .. • • H.B. H.D.1, S.D.2 65-2 8 bec001ing Speaker of the House ~--~--3 / , 1985 Mariana