Friday, September 27, 2013

FSM's new Compact fund distribution formula becomes law without signature

FSMIS (September 27, 2013): The new Compact fund distribution formula in the FSM through Congressional Act No. 18-12 has become a public law (PL No. 18-12) pursuant to Article IX Section 22 of the FSM Constitution.

The Congressional Act changes the distribution formula of Compact funds by reducing the share of the National Government from 10% to 5% and increasing those of the States.

Congress passed the new formula as Congressional Act No. 18-12 on September 14, two days after opening the Second Regular Session.

In a transmittal letter of September 27 to FSM Speaker Dohsis Halbert signed by Vice President Alik L. Alik, some “practical difficulties” and defects of the new formula were brought up, while also highlighting that the Congressional Act itself “is clearly deficient”.

One defect in the Congressional Act referred to in the letter to Speaker Halbert was that the formula, originating from an EPIC Resolution #2005-3-01, as well as certain languages of Title 55 Sections 303 and 306 of the FSM Code relate to a distribution inclusive of ALL Compact grants. Yet, although not supported by the language of the amending Act itself, Speaker Halbert on September 25 indicated that the intent of Congress was not to include Supplemental Education Grant in the new formula.  Hence, there appears to be a lack of clarity on what the intent of Congress is.

“Pursuant to the Budget Procedures Act of 1981, in April 2013 the President submitted to Congress the proposed Fiscal Year 2014 Budget including the Compact Budget Request. Congress acted on that submission through Congressional Resolution No. 18-29.”

At the very least, the amendment changes established official action on the proposed budget concurred to by Congress as previously shown.   

Referring to the decision to suddenly implement a new distribution, the letter also emphasized how such distribution is a disruptive fundamental change to works developed over months of planning and consultation.

“It is impossible to recreate a responsible and realistic budget for the National Government in just a matter of few days. Precisely, the Budget Procedures Act was enacted in order to avoid haste in enacting a national budget.”

Congress has been urged to “revisit the legal defects” and “correct them as soon as possible”. Unless extended, the 20-day regular session will end on Tuesday, October 1st

For inquiries, call the FSM Public Information Office at 320-2548 or email

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