PALIKIR, POHNPEI. May 17, 2014 – The Fourth Regular Session of the 18th Congress of the Federated States of Micronesia convened in Palikir on Monday, May 12 to begin the review process for the National Government budget for Fiscal Year 2015 and other matters pending before the Body.
Along with the 2015 National Government Budget, Congress is expected to address certain issues that have become of serious concern to the Body. Primary among the concerns are: the management and operations of the National Oceanic Resource Management Authority (NORMA); the impending deadline of May 31st for the Nation’s Tax Reform efforts; and the recently passed measure to liberalize the Nation’s telecommunication services.
After the morning’s formalities of convening a Session, the rest of Monday was devoted to an oversight public hearing by the Congressional Committee on Resources and Development (R&D) with NORMA and its management to review the Authority’s general management and that of its Board; NORMA’s interactions and general arrangements with partners and stakeholders; and other fisheries related issues. The Committee on R&D continued its review all afternoon the following day with NORMA’s Board of Directors.
During Tuesday’s morning session, Members requested an update on the progress of the Nation’s long-dragged out Tax Reform in light of the approaching deadline extended from March 31, 2014 to May 31, 2014. The deadline or “sunset clause” as it is often referred to was originally set for April 19, 2013 but it has since gone through two extensions with PL 18-16 being the fourth and latest.
The extension had, during the last session in March, elicited intense floor discussion with Members in discord over another extension in what they said had been an agreement among the National and State Leadership in 2005 for Congress to take the lead to establish the national mechanisms for, an overhaul of and reform to, the existing tax system in order for the states to follow suit. Congress had gone through years of grueling legislative process to establish the suitable mechanisms and passed the first measure in 2011 with PL 16-75 which established a national tax authority and a year later passed PL 17-50 to establish a uniform tax legislative mechanisms among all five governments and placed a timeline or sunset clause to launch the Nation’s unified tax reform system. The sunset clause had since then been extended three times.
Although some Members had questioned the rational of another extension and whether the states’ hesitation was a subtle nod to their level of commitment, the strong support by some Members and persuasion by other Members eventually enabled the fourth extension of the Tax Reform deadline.
The clause had then been extended for another 60 days on the premise that the Tax Reform Task Force would endeavor to find workable solutions, even if it means removal of personnel from the Task Force, in order for all states to be on board.
With last session’s discussions still fresh on their minds, Members raised their concerns during the Tuesday morning session on whether there is progress by the states on the impending deadline and requested the committees with jurisdiction to have the task force update Congress on their efforts.
The final issue of major concern to Congress was brought up by Speaker Dohsis Halbert when he expressed his disappointment with the seeming misinformation given to the Congress regarding the recently passed Telecommunications Act.
Speaker Halbert stated that the Congress will hold oversight hearings to find out why the Executive Branch previously requested passage of the Telecommunications Act as a matter of urgency in order to utilize a grant to build modern infrastructure for the Nation, specifically a fiber optic cable. At their request Congress accelerated its efforts and passed the Act just to be advised later by that fiber optics would not be part of the World Bank grant and instead the grant would be applied towards renewable energy. The appropriate committees were tasked to hold oversight hearings to understand how this was allowed to transpire.
Members were in accord with Speaker’s statement and echoed the request for oversight hearings with the Executive Branch.
Congress went into recess after Wednesdays’ session to allow the committees to address the national budget along with pressing issues within their jurisdictions and is scheduled to reconvene on Monday – May 19, 2014.
The Speaker’s statement in its entirety is as follows:
“The False Start
As we approach the Micronesian Games in July, I am reminded of a problem that occasionally occurs in track-and-field: the problem of a false start. Sometimes a runner is so excited that he anticipates the starting gun, and runs down the length of the field, giving his all and the performance of his life, before discovering that this run is disqualified because of the false start. He has to start the race all over again, but this time his energy is spent, and he cannot perform as before.
This country has just given the performance of a lifetime, giving its all to pass a telecommunications liberalization bill. It was difficult, hard to understand, politically divisive, but we did it, with the hope to receive a grant to build a modern telecommunications infrastructure for the nation, especially a fiber optic cable for Yap. Now we are told that it was a false start. Fiber optic is not coming. Instead we should get ready and work toward a grant for renewable energy. Under the circumstances, what kind of performance can this country and this Congress, their energy spent from the fiber optic race, be expected to provide?
We are now informed that this plan B was in the work for months, just in case. But why was Congress NOT told that there was this alternative? We were told instead that it was fiber optic or bust, that the time for alternatives was over, that people had been working for three years on the fiber optic project. Was it a lie, a deliberate deception, or a farcical show of incompetence? Congress will hold oversight hearings to find out. In the meantime it is fair to say that credibility is now in short supply, which does not bode well for the second performance.
I have said it before and I will repeat. The bedrock of government work is trust. We need to trust each other. Where trust is lacking decisions become difficult. We may be in such a situation. I came to this session expecting jubilation for work well done. I am afraid this may not be the case and more toil is ahead.
Thank you very much.”