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Major issues of Fourth Regular Session of 18CFSM

PALIKIR, POHNPEI.  June 4, 2014 – Congress adjourned its Fourth Regular Session with measures that included the repositioning of the Nation’s coconut development under the Petroleum Corporation, the establishment of state sub-accounts in the FSM Trust Fund, and a moratorium placed on the Telecom Act of 2014, among many others.

State of the Nation
Congress had invited the President to address the Congress and the Nation on his Administration’s accomplishments for the past year and its aspirations for the upcoming year.  The President delivered his message to Congress on May 29th in front of a packed Chamber and to the whole Nation through live broadcast.

Deadline expires on Nation’s Tax Reform efforts
The deadline has expired on the Nation’s long drawn out effort to reform its tax systems into a single unified entity.  During the Special Session in April, Congress had once more extended the deadline for implementing the Nation’s tax reform to allow the Task Reform Task Force to get everyone on board.  The report from the Committee on Ways and Means in April had urged more actions from the TRTF noting that the latest extension is premised on the understanding that the Task Force would “do what it can to bring in all the states, including working with and finding creative solutions for the states that are still reluctant. If that requires a change in personnel in the Task Force, that is something for the President to consider, but your committee is impatient for results. “

Following lengthy floor discussions, Congress had extended through Public Law 18-51 the sunset clause, noting that “if any of the four states of the Federated States of Micronesia have not passed into law value added tax legislation as of midnight May 31, 2014, this act is null and void.”

Without information from the Task Force on its progress, Congress adjourned on May 31, 2014 without extending the sunset clause. 

Moratorium on Telecom Act of 2014
Congress has placed a moratorium on certain provisions of the recently enacted Telecommunications Act of 2014. Through Congressional Act (CA) 18-75, Congress has delayed the effective date of Chapter 3 of the Telecom Act until May 2015, but maintained the provision to liberalize telecommunication services in the FSM.  A decision based on information given to Congress that the expected grant from the World Bank toward fiber optic was no longer available for the FSM. Chapter 3 is the establishment of the Nation’s independent regulatory authority on telecommunications and setting forth of its powers and duties along with prerogatives in its enhancement of affordable services to the Nation. 

State sub-Accounts in the FSM Trust Fund
Another measure was CA 18-73, which established sub accounts for the state governments in the FSM Trust Fund with each state to appoint its government representative to the Board of Trustees. Congress’ purpose for the measure is to provide a mechanism for additional income for the States come 2023 and in addition it is in line with the National Government’s plan to give more money and financial autonomy to the States.   The measure was vetoed in an earlier form for vagueness in the service terms and removal of board members, among others.  Those concerns have been detailed in the new Act for board members to serve a four-year term of office with each government having the authority to remove its representative on the Board.

Licensing clarification and establishment of Captive Insurance Revolving Fund
Another outcome of the Fourth Regular Session is CA 18-77, a two-fold measure which first, clarified the authority of the Insurance Board which basically allowed the Board’s discretion in the renewal of insurance licenses.  The second part of measure called for the establishment of an Insurance Revolving Fund where the fees collected from said licenses would be deposited with a threshold of $50,000 placed on the fund by Congress.

Dissolution of Coconut Development Authority
A major measure passed by Congress was the merger of the Coconut Development Authority (CDA) under the Nation’s Petroleum Corporation. The CDA had been struggling under various setbacks for a while and has been heavily subsidized by the National Government.  After lengthy consultations and feasibility studies by both Congress and the entities involved, Congress passed CA 18-70, to dissolve the CDA and repose the Nation’s responsibilities for coconut development under the FSM Petroleum Corporation. Upon becoming law, the FSM Petroleum Corporation will assume the authority to engage in the manufacturing and processing of biofuel and other products derived from the coconut tree as well as collection, marketing, selling, and distribution of all other products derived from the coconut tree within the parameters established by the law.

Smoking ban of 150 feet from national facilities
Another measure that resurfaced this session was the ban on smoking within 150 feet of national government facilities.  The measure had died in the 17thCongress in a previous form for vagueness on the perimeters of the smoking area.  With the perimeter of the smoking areas defined and to support the Department of Health and Social Affairs’ work to control and prevent tobacco use, and to promote good health in general for the Nation, Congress passed CA 18-74, and defined a ban on smoking within 150 feet of property that is leased or owned by the National Government.

Supplemental for the Legislative Branch
Congress also passed CA 18-66 which supplemented the Legislative Branch budget with $1,294,000: $294,000 to address certain aspects of Congress administration and operation, while $1,000,000 is to override President’s veto of the Nation’s investment in the ‘Our Air’ service route.

Following the passage and adoption of measures before the Body, the 18th Congress of the Federated States of Micronesia adjourned its Fourth Regular Session on May 31, 2014.
In accordance with its Rules of Procedures, the next Regular Session of the Congress is scheduled for September 12th. Nevertheless, the President or the Congress itself  has the Constitutional right to call for a Special Session anytime.

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