CNMI Governor Vetoes Tax On Sugary Beverages, House Withdraws Bill

Veto message to serve as guide for rewriting the bill

By Cherrie Anne E. Villahermosa

SAIPAN, CNMI (Marianas Variety, June 14, 2016) – The House action to recall the sugar tax bill is moot because the measure was already vetoed by Gov. Ralph Torres.

The House of Representatives on June 7, 2016 adopted a motion of Rep. Felicidad Ogumoro, the bill’s author, to recall H.B. 19-99.

It turned out that Torres had vetoed the measure on June 2, 2016, a day before he left for Washington, D.C. to participate in the 902 discussions with the White House.

Lt. Gov. Victor Hocog, as acting governor, informed the Legislature on June 10 that he took notice of the House action recalling the bill but added that it was already too late.

“I regret to inform you that Gov. Ralph Torres already took action on the bill on June 2, 2016 by disapproving it. His veto message is enclosed,” Hocog stated in his transmittal letter to Speaker Rafael Demapan and Senate President Frank Borja on June 10.

Vice Speaker Joe Deleon Guerrero said the veto message from the governor will serve as a guideline in drafting a new bill.

Some lawmakers, however, wanted to know why they were not informed about the governor’s veto.

The administration said it was a case of miscommunication, adding that the governor’s office at the time was mainly focused on the 902 discussions.

In his veto message, the governor said he did not dispute the bill’s intent which is to improve overall community health, but he had concerns with the bill in its current form.

“The bill does not include any provision that actually creates a special healthcare impact account. Nor does it specify whether the account is a component of the general fund,” Torres said.

“Section 1412 (b) of this bill states that interest and penalties collected on the taxes imposed by this section shall be deposited in the Special Healthcare Impact Account for the purposes provided in subsection (c) (1) of this Section.

“Section 1412 (c) (1) states that 60 percent of the revenues collected shall be allocated and deposited in the Special Healthcare Impact account and divided as follows. This is a fundamental flaw, as funds cannot be deposited into an account that does not exist. Please refer to 2 CMC Section 3551 (creating the Solid Waste Management Revolving Fund); and 2 CMC Section 3606 (creating the Commonwealth Mitigation Bank Revolving Fund).”

He said there is also no clear evidence that the tax will not be overly punitive for businesses and consumers.

“While this bill has warranted my veto, it does not mean we should stop having the necessary discussions about the health and welfare of our community. I want to make it clear that it is a priority of my administration to promote a healthy and prosperous community and will genuinely offer my assistance to the Legislature and the stakeholders in creating legislation that offers comprehensive solutions to the health problems affecting our islands.”

Marianas Variety
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