Government of the Federated States of Micronesia

Third FSM Constitutional Convention, Day 11

POHNPEI, Palikir (FSM Information Service): November 22, 2001 - The first Committee Proposal has entered the Convention arena this morning with the introduction of C.P. 01-1 by the Committee on Public Finance and Revenue, to confer on the National Government and the States concurrent power to levy value­added taxes. Cost of administering and collecting taxes for the States would also be borne by the National Government. Three other proposals were introduced during the 11th day of the Convention. The Pohnpei State Delegation introduced D.P. No. 01-43, to amend Section 3 of Article XI and limit the terms of judges to not more than 15 years. The other two were introduced by the Kosrae Delegation. D.P. No. ­144, to amend Section 4 of Article IX of the FSM Constitution to read as: "A treaty is ratified by vote of 2/3 of the membership of Congress, except that a treaty delegating major powers of government of the FSM to another government shall also require majority approval by the legislatures of 2/3 of the States. Prior to ratification of any other treaties, Congress must consult with each state and obtain the approval of 3/4 of the states." Finally, D.P. No. 01-45, to change Section 5 of Article IX of the FSM Constitution to read as: "(n)ational taxes shall be imposed uniformly. Not less than 80% of the revenues shall be paid into the treasury of the state where collected, of which not less than 10% shall be apportioned to the chartered municipal governments in a manner provided by states law." For public hearings, the Committee on Public Finance and Revenue is scheduled to hold public hearings on Monday, November 26, 2001. The hearings will take place at the FSM Department of Foreign Affairs Conference Room. The following proposals are the subjects of the hearings: D.P. No. 01-12, to share revenues derived from the commercial exploitation of living resources in the 200-Mile EEZ; D.P. No. 01-13, to replace the current 50/50 revenue sharing formula in the Constitution with a tax revenue sharing formula of 80 percent State and 20 percent National Government; D.P. No. 01-14, to include the affected island in the revenue sharing of non-living resources in the 200-mile EEZ; D.P. No. 01-16, to amend section 5 of Article IX, by increasing the amount of revenue that shall be paid into the treasury of the states from 50% to 80%; and, D.P. No. 01-27, to amend section 2 (d), Article IX of the FSM Constitution by deleting the semi colon and inserting in its place a comma and adding thereto the phrase "provided a state may impose a surtax on any National tax, duty, or tariff based on imports." Invited to the hearings are members of the general public, the Chairman of the Joint Committee on Compact Negotiations or his designee, Secretaries of the FSM Departments of Economic Affairs, Foreign Affairs, or their designees, the Secretary of the FSM Department of Finance and Administration, the Assistant Secretaries of the Divisions of Budget and National Treasury, State Governors or their designees, Directors of the State Treasuries, the Executive Director of the Micronesian Fisheries Authority or his designee, and Members of EMPAT. Written comments should be submitted no later than the time and date of the hearing to The Committee on Public Finance and Revenue, Third FSM Constitutional Convention, P.O. Box PS 140, Palikir, Pohnpei FM 96941. Fax No. 320-5529.

For further information on this release, please contact:

FSM Office of the President
Public Information: Press, Radio, Video
P.O Box 34
Palikir Station, Pohnpei, FM 96941
Tel.: (691) 320-2548/2092
Fax.: (691) 320-4356