FSMIS (August 21, 2013): President Manny Mori signed Congressional Acts No. 18-07 and 18-08 on August 15 with mixed feelings. The two Acts have become Public Law No. 18-08 and Public Law No. 18-09.
These legislations are similar in that they forgive the State of Kosrae and the State of Chuuk from having to repay the remaining balances of the recovery loans extended to the State of Kosrae, through PL No. 14-140, and the State of Chuuk, through PL No. 10-31.
The President thanked Congress for passing the Acts. However, he observed with “disappointment” that no conditions were imposed to ensure that the respective States would fulfill the fiscal reform objectives that were to be achieved as quid pro quo conditions of the loans.
For Chuuk, part of the understanding established with the National Government was to return to a unicameral legislature, install a public auditor and hire a special prosecutor within a specified timeframe. None of these has been achieved.
Similar financial reforms were required of the State of Kosrae. However, the cash flow problem has not improved and continues to haunt everyone.
“The two State’s outstanding debts may be erased from their respective books through these acts, but the needed reforms will remain without being resolved.”
President Mori raised the fact that another loan had been extended to the State of Chuuk for FEMA reimbursement in the amount of $978,860 through PL No. 17-68, for which the State has not indicated intention to repay. This loan could have been part of the absolution Act.
All the States received FEMA reimbursement funds through the same public law (17-68) but only Chuuk State was required to work out a repayment plan with the President in an indefinite timeframe.
Also on the same day, President Mori signed into law Congressional Act No. 18-10. The Act was made to correct an error in a previous appropriation which failed to designate allottee(s) of funds appropriated for the Election District No. 2 (Northern Namoneas Region) in Chuuk State.
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