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Senate told $2.7 million IPI settlement recorded as gross revenue tax; committee seeks legal and budget guidance
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Summary
Finance officials told the Senate they received $2.7 million from an IPI court settlement that was recorded under gross receipts/gross revenue tax for FY2025. Senators asked for written guidance on how the funds will be allocated, whether they trigger supplemental budgeting and whether statutory rules directing 25% to retirees apply.
The Senate’s finance committee heard on Sept. 16 that the government received $2,700,000 from an IPI settlement but has not yet published a plan for how the money will be used.
Senator (Chair) Ayot opened the discussion asking for “the most accurate information as to where that money is gonna go and how is it gonna be used,” noting public interest in allocations and reporting obligations to the legislature.
A finance official identified as Dave said, “As of yesterday, we received a 2,700,000.0 of, from that from the IPI settlement, but I don't have any information what is our plan with that, collection yet.” The official added later that in the government’s accounting system the amount is “recorded under the GRT” (gross receipts/gross revenue tax).
Senators pressed staff and counsel about the procedural consequences if the receipt is recorded in FY2025, including whether it would trigger a supplemental budget process or be available in FY2026. One senator observed that because the payment was received in FY2025, “it should be recorded in 2025, and it should trigger supplemental budget and preparation per se,” and asked staff to work with the House on timing if a supplemental is required.
Committee members also asked legal counsel whether statutory language requires that settlement or GRT receipts be applied to retiree payments. Acting finance staff (Pam) cited 4 CMC 2308 during the meeting, saying the statute’s provisions apply: “According to 4 CMC 2308, the payment for CGRT, which is the 2,700,000.0, will go for for the payment of the 25% of class members' full benefits.”
Senators asked the finance office to provide written clarifications and supporting documents showing how the settlement was recorded, whether it carries descriptive language from the court or bankruptcy proceedings about intended use, and whether the receipt will be treated as an ordinary GRT cash infusion or earmarked by statute or court order. The committee also requested disclosure of any audit or receivable records that explain whether the $2.7 million is a partial receipt of a larger judgment; one senator said there had been public references to a larger sum (about $5–6 million) but asked the finance office to confirm amounts.
Several committee members emphasized transparency and timeliness. One member asked finance to “kindly provide that information to community as soon as you can” if the material is not legally restricted. The committee also asked counsel to clarify any notification or statutory reporting required to the legislature.
No formal action or vote was recorded on the settlement at the hearing; senators directed staff to follow up with written documentation and legal guidance and to brief the committee on whether the amount will be treated as FY2025 revenue subject to supplemental appropriation processes or otherwise earmarked.
