AN ACT 

To authorize the Marianas Public Lands Authority in conjunction with the 

Commonwealth Development Authority to incur public debt in an amount of 

up to Forty Million Dollars ($40,000,000) for the settlement of land 

compensation claims against the Commonwealth and for other purposes. 

BE IT ENACTED BY THE TIDRTEENTH NORTHERN MARIANAS 

COMMONWEALTH LEGISLATURE: 

Section 1. Short Title. This Act may be cited to as the "Land Compensation Act 

of2002." 

Section 2. Findings and Purpose. The Legislature finds that the Commonwealth 

cunently owes to its citizens approximately F011y Million Dollars ($40,000,000) for land 

acquired by eminent domain or other legal process. The Legislature fm1her finds that the 

current rate of repayment is unacceptable, and the prompt compensation for such land 

taking serves the Conunonwealth's best interest. While in the past land taking claims 

against the Commonwealth were settled largely through an exchange of public land, the 

diminishing availability of public land, coupled with other competing public land uses, 

requires the establishment of a compensation program to pay for the taking of private lands 

for public uses, such as road and ponding basin construction The purpose of this Act, 

therefore, is to authorize the Marianas Public Lands Authority, in conjunction with the 

Commonwealth Development Authority, to incur public debt in an amount of up to 

$40,000,000, and to use the proceeds to settle and to discharge outstanding land 

compensation claims against the Commonwealth. Similar to Public Law 11-14, a portion 

of the liquid fuel tax revenue and the entire aviation fuel tax revenue collected under 4 

CMC § 1403 would be reserved specifically for the repayment of the public debt 

authorized herein. 
(a) The Marianas Public Lands Authority is rereby authorized to incur public 

debt in an amount up to $40,000,000, for the financing of the retirement of land 

compensation claims against the Commonwealth for land taking by eminent domain 

or other legal process. In accordance with 4 CMC § 10203(a)(27), the Marianas 

Public Lands Authority shall arrange for the public debt authorized under this Act in 

cooperation with, and subj ect to the approval of, the Commonwealth Development 

Authority. 

(b) The public debt authorized herein shall be denominated in and payable 

in United States Dollars and not in the equivalent amount of any foreign cunency. 

(c) This authorization for public debt is made only for the purpose of 

financing, by Marianas Public Lands Authority, the retirement of land compensation 

claims against tre Commonwealth and only up to a total primary liability not to 

exceed $40,000,000, inclusive of any commission or fee. 

(d) The public debt authorized herein is only authorized with an interest 

rate not exceeding 7% per annum simple interest on the principle amount remaining 

outstanding and unpaid and with repayment terms not exceeding 20 years for payment 

in full of principle and interest. 

(e) The public debt authorized herein shall be backed by the full faith and 

credit of the Commonwealth government and shall be a debt of the Commonwealth. 

Section 4. Land Compensation Fund. 

(a) There is hereby established a special fund within the Department of 

Finance which shall be known and designated as the Land Compensation Fund. 

(b) The purpose of the Fund shall be to pay principal and interest on any 

financing entered into by the Marianas Public Lands Authority for the financing of 

the retirement of land compensation claims against the Commonwealth as authorized 

by this Act. 

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expenditure authority over the Fund, subject to approval of claims by the Board. 

(d) In implementing this Act, the Matianas Public Land Authority shall 

first compensate the acquisition of private lands for right of way purposes, including 

but not limited to public road construction. After those claims have been 

compensated, the Authority shall then compensate those claims involving the 

acquisition of private land for the purpose of constructing public ponding basins. 

Wetland and other claims shall be entertained only after claims involving right of way 

and ponding basin acquisitions have been compensated. 

Section 5. Amendment. Subsection (e) of 4 CMC § 1803, is amended as follows: 

"(e) Fuel tax distribution. 

(i) Notwithstanding any law to the contrary, beginning October 1, 

1998, and annually thereafter, the Department of Finance shall deposit 

$2,000,000, collected from the liquid fuel tax imposed under 4 CMC § 

1403(a) into the Public School System Building fund established in 1 CMC § 

2281. Such funds shall be continually appropriated to the Public School 

System for the sole purpose of paying the principal and· interest on any 

financing entered into the Public School System pursuant to House Joint 

Resolution 10-36. The funds shall be nonlapsing except that upon 

certification by the Secretary of Finance that all principal and interest on all 

financing has been paid in fuU and discharged, any funds remaining in the 

Public School System Building Fund shall lapse to the general fund. 

(ii) After the amount in subparagraph (i) has been transferred, and 

notwithstanding any law to the contrary, beginning October 1, 2002 and 

annually thereafter, the Department of Finance shall deposit the balance 

amount of the liquid fuel tax collected under 4 CMC § 1403(a) and the entire 

amount of the aviation tax collected under 4 CMC § 1403(b) into the Land 

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Marianas Public Lands Authority for the sole purpose of paying the principal 

and interest on any financing authorized by this Act. Provided, that, in the 

event the amount in the Land Compensation Fund is insufficient to cover any 

requisite payment, the Governor is hereby authorized, notwithstanding any 

contrary law, to pay the remaining balance from the general fund. The funds 

in the Land Compensation Fund shall be nonlapsing, except, upon certification 

by the Secretary of Finance that all principal and interest on all financing has 

been paid in full and discharged, any funds remaining in the Land 

Compensation Fund shall lapse to the general fund." 

Section 6. Application This Act shall apply to land compensation claims against the 

Commonwealth Government submitted to the Marianas Public Land Corporation, or its 

successor agency, on or after January 1, 1990. 

Section 7. Income tax application Any compensation received under this Act shall 

not be subject to the earnings tax imposed under 4 CMC § 1202(b)(2). 

Section 8. Land Exchange Option 2 CMC § 4144 is amended by adding a new 

subsection (d) to read as follows: 

"(d) Subject to the approval of the Board of the Marianas Public Land 

Authority, an owner of private land who qualifies for a public land exchange may 

elect for an equitable land exchange, notwithstanding subsections (b)(2) and (c) of 

this section, provided that the area of public land shall not exceed twice the area of the private land to be exchanged." 

Section 9. Severability. If any provision of this Act or the application of any such 

provision to any person or circumstance should be held invalid by a court of competent 

jurisdiction, the remainder of this Act or the application of its provisions to persons or 

circumstances other than those to which it is held invalid shall not be affected thereby. 

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constmed as affecting any existing right acquired under contract or acquired under statutes 

repealed or under any mle, regulation or order adopted under the statutes. Repeaters 

contained in this Act shall not affect any proceeding instituted under or pursuant to prior law. 

The enactment of this Act shall not have the effect of tenninating, or in any way modifying, 

any liability, civil or criminal, which shall already be in existence at the date this Act 

becomes effective. 

Section 11. Effective Date. This Act shall take effect upon its approval by the 

Govemor or upon it becoming law without such appro val. 

CERTIFIED BV: 

/s/___,::-----=--=------

HEINz S. HOFSCHNEIDER 

SPEAKER OF THE HOUSE 

ATTESTED TO BY: 

/s/_-=--c:-:::-----

EvELYN C. FLEMING 

HOUSE CLERK 

Approved this 23rd day of Julv, 2002 · 

/sl ____ -=-----c,--------

JvANN. BABAUTA 

GOVERNOR 

COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS 

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