Title 4, Economic Resources

Rating Organization Membership. Nothing contained in this chapter shall be construed as requiring any insurer to become a member of or a subscriber to any rating organization. Source: PL 18-34 § 5(7637) (Feb. 14, 2014), modified. Commission Comment: PL 18-34 indicated that the te…

Extended Powers of the CNMI Insurance Commissioner. The CNMI Insurance Commissioner shall have the authority expressly conferred to the state by the Affordable Care Act [42 U.S.C. 300gg-22(b)] any public law or federal legislation related to insurance as amended or supplemented f…

Definitions. As used in this chapter: (a) “Administrator” means the Administrator of the Wage and Hour Division of the United States Department of Labor. (b) “Commonwealth” means in the Commonwealth of the Northern Mariana Islands and the geographic area comprising the Commonweal…

Special Industry Committees for the Commonwealth of the Northern Mariana Islands. (a) Establishment: basic committee requirements. The Governor, shall as soon as practicable: (1) Appoint a special industry committee to recommend the minimum rate or rates of wages to be paid under…

Legislative Action Required. The legislature shall act within 120 days upon receipt of a written report from a wage review committee pursuant to 1 CMC § 2602(e)(1)(i); provided, that any action taken by the legislature shall not decrease the minimum wage rate recommended by the w…

Public Debt Authorization. This article is a bond authorization act within the meaning of PL 11-3 (4 CMC §§ 10451 et seq.). The Commonwealth Economic Development Authority (CEDA) on behalf of the Commonwealth, is hereby authorized to issue, in one or more series, up to $60,000,00…

Application of the Internal Revenue Code, In General. (a) The United States Internal Revenue Code (“Internal Revenue Code” or “IRC”), made applicable by this chapter, is a statute adopted as a local territorial income tax. The IRC as herein incorporated is made a part of Commonwe…

Internal Revenue Code Adopted. (a) Definition: Internal Revenue Code. “Internal Revenue Code” means the following provisions of the Internal Revenue Code of 1986 as further amended as below specified, where not manifestly inapplicable or incompatible with the intent of the Covena…

Nonretroactivity of Tax on Commonwealth Sourced Income. In regard to the taxation under the NMTIT of income accruing on or prior to January 1, 1985, the NMTIT shall in all cases be interpreted as subjecting to the NMTIT only that income which is not “Commonwealth sourced income.”…

Anti-Avoidance. Deductions and Credits. In order to prevent the mismatching of income and corresponding deductions and credits, which, in a start-up setting, would result in complete avoidance and not just deferral: (a) NMTIT Section 161 shall be construed as though it contained …

Clarifying Provisions. (a) The accelerated cost recovery system shall be applicable to all qualified fresh-start assets, which shall be treated as used property for all NMTIT purposes. (b) No credit under NMTIT Section 38, and no deduction under NMTIT Section 179, shall be allowe…

Disincentives to Off-island Investment. (a) The amount of any deduction allowed to any taxpayer under the NMTIT sections enumerated in subsection (d) of this section shall be deemed additional gross business revenues, and taxed accordingly under chapter 3 of this division [4 CMC …

Private Letter Ruling Procedures. (a) A ruling is a written statement issued to a taxpayer or his authorized representative by the Secretary of Finance which interprets and applies the tax law to a specific set of facts. (b) A request for a ruling by a taxpayer or his authorized …

Tax Relief. (a) General Rule. Every person subject to the NMTIT shall be entitled to a rebate in the amount determined under subsection (b) of this section. Every taxpayer shall be entitled to apply all or part of any rebate due to any tax reported on the return (including penalt…

Tax On Overpayments. There is imposed on every person who is subject to the NMTIT and who has an overpayment arising from any excessive credit, other than a credit relating to taxes withheld at the source, such as wages, and the credit relating to estimated taxes paid in excess o…

Foreign Sales Corporations Special Rule. To the extent provided in chapter 6 of this division [4 CMC § 1601 et seq.], a foreign sales corporation is exempt from taxation under this chapter. Source: PL 9-22, § 1 (§ 1710).

Rebate Offset Procedure. (a) Amounts properly subject to rebate offset under 4 CMC § 1708 shall be rebated by filing a timely income tax return which includes the claim for rebate offset form for the taxable year to which the rebate offset relates. However, claims for rebate offs…

Special Sourcing Rules of Certain United States Individuals. (a) For any United States individual moving to the Commonwealth from Guam, American Samoa, and/or the United States, irrespective of any other provision of law, the following sourcing rule will apply if a United States …

Interest on Overpayments. Interest as allowed by NMTIT Section 6611 on an overpayment shall be calculated only on the amount not already rebated. Source: PL 9-22, § 1 (§ 1713).

Special Rebate Trust Account. At least 50 percent of all amounts paid to the government with respect to taxes imposed under this chapter shall not be placed into the General Fund or commingled with other funds, but shall be deposited by the Secretary of Finance into one or more F…

Shortfall in Trust Account. With regard to the trust accounts created and authorized by 4 CMC § 1714, if the Secretary of Finance deems it necessary because there are insufficient trust account proceeds, he may withdraw funds from the General Fund to meet any liabilities of the t…

Exemption From Rebate Limitation. Notwithstanding the rebate limitation set forth in 4 CMC § 1708(d)(1), the rebate offset amount shall be allowed on any income tax paid on interest income received by the financing institution pursuant to the interim financing arrangement authori…

Special Rebate Trust Account for Business Located Within Economic Incentive District(s). One hundred percent of all amounts paid to the government by Economic Incentive District licensees with respect to taxes imposed under this chapter on businesses located within and receiving …

Annual Meeting. (a) A corporation shall hold annually at a time in or fixed in accordance with the bylaws a meeting of shareholders. (b) Annual shareholders’ meetings may be held in or out of the Commonwealth at the place stated in or fixed in accordance with the bylaws, annual m…

Special Meeting. (a) A corporation shall hold a special meeting of shareholders: (1) On call of its board of directors or the person or persons authorized to do so by the articles of incorporation or bylaws; or (2) If the holders of at least 10 percent of all the votes entitled t…

Court-Ordered Meeting. (a) The Commonwealth Superior Court may summarily order a meeting to be held: (1) On application of any shareholder of the corporation entitled to participate in annual meeting if an annual meeting was not held within the earlier of six months after the end…

Action Without Meeting. (a) Action required or permitted by this part to be taken at a shareholders’ meeting may be taken without a meeting if the action is taken by all the shareholders entitled to vote on the action. The action must be evidenced by one or more written consents …

Notice of Meeting. (a) A corporation shall notify shareholders of the date, time, and place of each annual and special shareholder’s meeting no fewer than 10 nor more than 60 days before the meeting date. Unless this part or the articles of incorporation require otherwise, the co…

Waiver of Notice. (a) A shareholder may waive any notice required by this part, the articles of incorporation, or bylaws before or after the date and time stated in the notice. The waiver must be in writing, be signed by the shareholder entitled to the notice, and be delivered to…

Record Date. (a) The bylaws may fix or provide the manner of fixing the record date for one or more voting groups in order to determine the shareholders entitled to notice of a shareholders’ meeting, to demand a special meeting, to vote, or to take any other action. If the bylaws…

Shareholders’ List for Meeting. (a) After fixing a record date for a meeting, a corporation shall prepare an alphabetical list of the names of all its shareholders who are entitled to notice of a shareholders’ meeting. The list must be arranged by voting group (and within each vo…

Voting Entitlement of Shares. (a) Except as provided in subsections (b) and (c) of this section or unless the articles of incorporation provide otherwise, each outstanding share, regardless of class, is entitled to one vote on each matter voted on at a shareholders’ meeting. Only…

Proxies. (a) A shareholder may vote his share in person or by proxy. (b) A shareholder may appoint a proxy to vote or otherwise act for him by signing an appointment form, either personally or by his attorney-in-fact. (c) An appointment of a proxy is effective when received by th…

Shares Held by Nominees. (a) A corporation may establish a procedure by which the beneficial owner of shares that are registered in the name of a nominee is recognition may be determined in the procedure. (b) The procedure may set forth: (1) The types of nominees to which it appl…

Corporation’s Acceptance of Votes. (a) If the name signed on a vote, consent, waiver, or proxy appointment corresponds to the name of a shareholder, the corporation if acting in good faith is entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as…

Quorum and Voting Requirements for Voting Groups. (a) Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those shares exists with respect to that matter. Unless the articles of incorporation or this part provide otherwi…

Action by Single and Multiple Voting Groups. (a) If the articles of incorporation or this part provide for voting by a single voting group on a matter, action on that matter is taken when voted upon by that voting group as provided in 4 CMC § 4406. (b) If the articles of incorpor…

Greater Quorum or Voting Requirements. (a) The articles of incorporation may provide for a greater quorum or voting requirement for shareholders (or voting groups of shareholders) than is provided for by this part. (b) An amendment to the articles of incorporation that adds, chan…

Voting for Directors; Cumulative Voting. (a) Unless otherwise provided in the articles of incorporation, directors are elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present. (b) Shareholders do not have a…

Voting Trusts. (a) One or more shareholders may create a voting trust, conferring on a trustee the right to vote or otherwise act for them, by signing an agreement setting out the provisions of the trust (which may include anything consistent with its purpose) and transferring th…

Voting Agreements. (a) Two or more shareholders may provide for the manner in which they will vote their shares by signing an agreement for that purpose. A voting agreement created under this section is not subject to the provisions of 4 CMC § 4421. (b) A voting agreement created…

Procedure in Derivative Proceedings. (a) A person may not commence a proceeding in the right of a domestic or foreign corporation unless he was a shareholder of the corporation when the transaction complained of occurred or unless he became a shareholder through transfer by opera…

Company Purchase of Distributional Interest. (a) A limited liability company shall purchase a distributional interest of a: (1) Member of an at-will company for its fair value determined as of the date of the member’s dissociation if the member’s dissociation does not result in a…

Court Action to Determine Fair Value of Distributional Interest. (a) In an action brought to determine the fair value of a distributional interest in a limited liability company, the court shall: (1) Determine the fair value of the interest, considering among other relevant evide…

Dissociated Member’s Power to Bind Limited Liability Company. For two years after a member dissociates without the dissociation resulting in a dissolution and winding up of a limited liability company’s business, the company, including a surviving company under Chapter 9, is boun…

Statement of Dissociation. (a) A dissociated member or a limited liability company may file in the office of the Registrar of Corporations a statement of dissociation stating the name of the company and that the member is dissociated from the company. (b) For the purposes of sect…