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.