Public Law Updates from 7th Special Session of the 15th FSM Congress

Government of the Federated States of Micronesia

Public Law Updates from 7^th Special Session of the 15^th FSM Congress

Palikir, Pohnpei (FSM Information Services): May 7, 2009 - At the conclusion of the 7^th Special Session of the 15^th FSM Congress, several Congressional Acts were transmitted to the President for action. The following is a list of the Acts and the results of the President's review of them:

1) Congressional Act No. 15-80, "AN ACT TO FURTHER AMEND TITLE 2 OF THE CODE OF THE FEDERATED STATES OF MCRONESIA, AS AMENDED, BY AMENDING SECTION 203 THEREOF, TO PROPERLY PLACE THE PROJECT MANAGEMENT UNIT FOR THE COMPACT INFRASTRUCTURE GRANTS UNDER THE APPROPRIATE DEPARTMENT AT THE FSM NATIONAL GOVERNMENT, AND FOR OTHER PURPOSES."

This Act was originally vetoed by the President on March 27, 2009 based on the doctrine of separation of powers, the principal of checks and balances, and the executive powers to "faithfully execute and implement the Constitution and all national laws". The President viewed this Act as a constitutionally impermissible intrusion by the Congress into the domain of the executive branch of the national Government. The original transmittal letter to Congress on the veto pointed out separation of powers in the Constitution. Congress has the authority to establish departments by statute, but once the Department (such as the Department of Transportation, Communication, and Infrastructure) is set up by public law, the responsibility for the execution and implementation of the law rests with the President. The President, according to the FSM Code, assigns and allocates the "duties, responsibilities and functions of each department and office of the executive branch of the national government of the FSM" by executive directive. Executive Order No. 1, Art. XII, ordered that PMU be "directly responsible to the President". Congress, through enactment of this Act, has intruded into that executive domain of execution and implementation of the law. On March 28^th, 2009, Congress overrode the President's veto and this Act became Public Law 15-74. The constitutional difficulties raised in the President's veto message remain unresolved and he continues to encourage consultation and dialogue to find a solution to this issue.

2) Congressional Act No. 15-81, "AN ACT TO AMEND SECTIONS 103 AND 104 OF TITLE 36 OF THE CODE OF THE FEDERATED STATES OF MICRONESIA; AND FOR OTHER PURPOSES."

This Act was approved and signed by the President as Public Law No. 15-75. The President fully supports this bill as an update to FSM's corporation laws and hopes that it makes it more conducive for corporate investments. The Executive and Legislative Branches have been collaborating to establish a corporate income tax in the FSM. The proposed amendments in this Public law will "definitely elevate the national corporate income tax base by attracting regional and international corporate investments in FSM.

3) Congressional Act 15-82, "AN ACT TO FURTHER AMEND PUBLIC LAW NO. 15-32, AS AMENDED, BY AMENDING SECTION 1 THEREOF, TO CHANGE THE USE OF FUNDS PREVIOUSLY APPROPRIATED FOR THE STATES OF POHNPEI AND CHUUK, AND FOR OTHER PURPOSES."

This Act changes the amount of certain funds appropriated to the States of Chuuk and Pohnpei. The absence of relevant congressional standing committee reports obscured the congressional intent of the proposed changes, according to the President. He also felt concern over the increase of operating costs for Election District No. 5 of Chuuk State. The issue here is that the delegation office receives funding through regular Congressional appropriation as part of the regular operating expenses budget, while at the same time, the same offices receive funding through public project appropriations. Based on the uncertainty of the legality of this, the President did not sign this Act into law, but allowed it to become law without his signature with the assumption that Congress is aware of this and that it meets all lawful requirements.

4) Congressional Act 15-83, "AN ACT TO AMEND PUBLIC LAW NO. 15-31 BY AMENDING SECTION 1 THEREOF, TO CHANGE THE USE OF CERTAIN FUNDS PREVIOUSLY APPROPRIATED THEREIN FOR THE STATE OF POHNPEI, AND FOR OTHER PURPOSES."

This Act amends Public Law No. 15-31 which appropriated the sum of $342,000 from the General Fund of the Federated States of Micronesia for the Fiscal Year ending September 30, 2008 for the purpose to fund Public Projects for Pohnpei State. The purpose of this Act is to change use and amounts of certain funds for Pohnpei States projects resulting in increasing and decreasing the sum of certain line items. The President decided to allow this Act to become law without his signature to reflect his support for the original intent of the legislation. The President stated that "Repetitive changes to appropriation law may implicate indecision of government planning and/or policy." Therefore, he chose not to sign the Act, but allow it to become Public Law No. 15-79 to show his continued support for those public projects and programs that advance the development of the Nation.

5) Congressional Act No. 15-84, "AN ACT TO FURTHER AMEND TITLE 18 OF THE CODE OF THE FEDERATED STATES OF MICRONESIA, AS AMENDED, BY AMENDING SECTION 202 TO DESIGNATE NORTHWEST POLOWAT HARBOR, OROLUK, HAUK AND ONOUN AIRSTRIPS ATOLLS AS OFFICIAL PORTS OF ENTRY IN THE FEDER5ATED STATES OF MICRONESIA, AND FOR OTHER PURPOSES."

Based on practical and enforceable reasons, the President has vetoed this Act. This legislation would effectively result in an increase in the size of the national government since ports of entry require facilitation of government services. Designating additional ports of entry without affording the President the necessary tools and resources for proper implementation is deemed "intrusion into Presidential powers and prerogatives of faithful execution of title 18 of the Code". The President believes that there are enough ports of entry, scattered throughout the Nation, to meet the needs of the National and State Governments and to serve the FSM people in terms of travel, communications, transportation and commerce. At this time of global financial recession, the challenge is to keep the government from expanding to save costs rather than growing additional burdens in financing new ports. President Mori encouraged Congress to revisit this matter whenever it is practicable and also suggested that a further analysis of the anticipated volume of commercial traffic and the strategic benefits to the FSM people need to be looked at to ensure that adding additional ports of entry to FSM are linked to the overall strategic development objectives of the Nation and the region.

6) Congressional Act No. 15-85, "AN ACT TO APPROPRIATE THE SUM OF $48,000 FROM THE GENERAL FUND OF THE FEDERATED STATES OF MICRONESIA FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2009 FOR THE PURPOSE OF FUNDING PUBLIC PROJECTS AND THE SOCIAL PROGRAM IN THE STATE OF CHUUK, AND FOR OTHER PURPOSES."

This Act requires a bit of history to explain. It goes back to P.L. No. 15-25, an appropriation for $366,255 from the 20% restricted funds previously allocated for Health and Education in Chuuk State. The purposes of the appropriation were originally for CPUC ($150,000) and for Chuuk State Health Care Plan ($216,255). The lapse date of the appropriation was September 30, 2008. P.L. No. 15-25 was amended on April 28, 2008 by P.L. No. 15-35, changing the breakdown of the $216,255 in the original appropriation. On December 30, 2008, P.L. No. 15-62 became law further amending P.L. No. 15-25, as amended, and again changing the breakdown in the original appropriation. C.A. No. 15-85, was created to appropriate the remainder of the $366,255 realized out of the 20% restricted funds allocated for Health and Education in Chuuk State. The President signed this Act into Public Law No. 15-77.

7) Congressional Act No. 15-86, "AN ACT TO REPEAL IN ITS ENTIRETY PUBLIC LAW NO. 15-66, THE RECENTLY-ENACTED PUBLIC PROJECTS LAW, AND FOR OTHER PURPOSES."

This Act effectively repealed Public Law No.15-66 which was an appropriation act in the amount of $1.4 million for public projects throughout the Nation. This appropriation was vetoed by the President in light of the emergency declaration, for the funds to become available to address the financial costs of assessment and humanitarian relief for the islands affected by the tidal surges in December of 2008. Congress overrode the President's veto, and instead, through expressed language in a committee report, gave the President access to this money by virtue of his ability to decree appropriated funds. During the course of addressing the needs of the nation, the President used approximately $1 million of this appropriation. Because this amount had never been needed by emergencies in the past, it was unclear how to deal with the replenishment of funds to fulfill Public Law 15-66. Because there was no provision in the Constitution or laws about replenishing decreed funds, the Congress, in its consultation with the Executive Branch, instead agreed to repeal Public Law 15-66 and President Mori signed this Act and designated it Public Law No. 15-76.

8) Congressional Act 15-87, "THE SUM OF $1,289,109 OR SO MUCH THEREOF AS MAY BE NECESSARY, IS HEREBY APPROPRIATED FROM THE GENERAL FUND AND OF THAT AMOUNT, $150,000 FROM THE FOREIGN ASSISTANCE FUND.

The President has vetoed this Act based on a constitutional defect. According to Article XII, Section 1(b) of the FSM Constitution, "Foreign financial assistance received by the National Government shall be deposited in Foreign Financial Assistance Fund. Except where a particular distribution is required by the terms or special nature of the assistance, each state shall receive a share equal to the share of the national government and to the share of every other state." Enactment of law is not required to withdraw funds from the Foreign Financial Assistance Fund. Simply put, Congress need not appropriate foreign financial assistance under the Foreign Assistance Fund. If the funds require particular distribution, such funds must be distributed in accordance with the particular distribution set forth in the terms or special nature of the assistance. But if the funds neither specify nor contain express terms or conditions, the funds must be distributed equally between the National Government and the four states. The Act incorrectly assumes that Congress has authority to appropriate $150,000 from the Foreign Assistance Fund in accordance with their own distribution as the Act sets out. (Please refer to Act 15-87 on the Congress website for details on the distribution.)

9) Congressional Act 15-88, "AN ACT TO FURTHER AMEND TITLE 52 OF THE CODE OF THE FEDERATED STATES OF MICRONESIA, AS AMENDED, BY AMENDING SECTION 405 TO REDUCE THE MINIMUM PREMIUM CONTRIBUTION FOR HEALTH INSURANCE OF PARTICIPATING AGENCIES OR PARTICIPATING BUSINESSES FROM FIFTY-TWO PERCENT TO FIFTY PERCENT OF THE PREMIUM PAYMENT FOR THEIR ELIGIBLE EMPLOYEES, AND FOR OTHER PURPOSES."

The President expressed his agreement to the general objective of the act, which is to encourage more health care insurance coverage to the public, but he has concern over the constitutionality of the manner by which this objective is being implemented. As it now stands, the national government is required to pay 52% of the premium for eligible national government employees, while businesses and agencies may contribute only 50% for their employees participating in the plan. The constitutional objection arises in the unequal treatment of participating employees. Effectively, employees in the national government pay a preferred rate of 48% while employees from other participating agencies and businesses are required to pay 50%. There is no explanation as to the rationale for this unequal treatment except for the stated objective to encourage more health care membership. The Constitution guarantees equal protection under the law (see sections 3 and 4, article IV of FSM Constitution), and to avoid a constitutional challenge since the health care plan is a government entity, the President has vetoed this Act and is recommending Congress carefully reconsider this piece of legislation bearing in mind the constitutional difficulty that he explained in his transmittal letter.

10) Congressional Act 15-89, "AN ACT TO AMEND THE CODE OF THE FEDERATED STATES OF MICRONESIA BY ENACTING A NEW TITLE 13 THEREOF FOR THE PURPOSE OF ESTABLISHING A LAW ON PUBLIC OFFICIAL FINANCIAL DISCLOSURES, AND ON POLITICAL CAMPAIGN FINANCING AND FINANCIAL REPORTING, AND FOR OTHER PURPOSES."

While President Mori expressed that this type of legislation is long overdue, and that he is in support of the intent of the Act, he is vetoing the Act in hopes of working with the Congress to improve the legislation. The law is currently viewed to have flaws that could potentially invalidate the law because it is deemed to be in conflict with the Constitution of the FSM, and in particular, with the separation of power between the branches of government. The Act has vested in the Director of the National Election Commission the power, therefore the duty to "faithfully execute and implement" the Act. Execution and implementation of the Act (when it becomes law) is an exclusive prerogative of the President under section 2(a) of article X of the Constitution. There are other areas in the Act that also take away the power of the President to execute "all national laws", and the law itself presents foreseeable practical administrative problems as well for the National Election Director to do with limited staff. The President ended his remarks to Speaker Figir by conveying his gratitude and appreciation to the Speaker and the Congress for the support and assistance they have given to him under his administration. He acknowledged the differences of positions that they have had and said he viewed these as evidence of a healthy and working democratic government.

11) Congressional Act 15-90, "AN ACT TO APPROPRAITE $540,000 FROM THE GENERAL FUND OF THE FEDERATED STATES OF MICRONESIA FOR FISCAL YEAR ENDING SEPTEMBER 30, 2009 FOR THE PURPOSE OF FUNDING THE T-3 PROGRAM OPERATION, PUBLIC PROJECTS AND SOCIAL PROGRAMS IN THE STATES OF CHUUK, YAP, POHNPEI AND KOSRAE, AND FOR OTHER PURPOSES.

The President communicated to Speaker Figir that he fully supports the intent to salvage the vocational T-3 program and the need for social projects and programs in the states, but that he is concerned about the appropriation for operational costs of Delegation Offices and Election Districts. This is a result of these offices being funded solely under the regular budget law for operation cost of all branches, departments, agencies, authorities and entities of the national government. Severance is necessary to avoid double funding these offices or legal setbacks that may arise. With these concerns, President Mori transmitted this Act back to Congress as Public Law 15-80, without his signature. (see #3 above on C.A. 15-82 for similar rationale.)