FLOOR

BILL NO.

29-0266

Twenty-Ninth Legislature of the Virgin Islands
January 24, 2012

An Act enacting the Employment Relation and Economic Recovery Act of 2012 and for other purposes

PROPOSED BY:

Senators Ronald E. Russell, Esq., Carlton “Ital” Dowe, Celestino A. White, Sr., Sammuel Sanes, Usie R. Richards, Alicia “Chucky” Hansen, Patrick Simeon Sprauve, Janette Millin Young, Neville A. James, Terrence “Positive” Nelson, Shawn Michael Malone, Alvin L. Williams, and Nereida Rivera O’Reilly

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WHEREAS, the current global economic crisis continues to gravely challenge the people of the United States Virgin Islands; and WHEREAS, the economic indicators for the United States Virgin Islands continue to present a picture of decreased economic activity; and WHEREAS, the economic crisis facing the people of the United States Virgin Islands has been compounded by the sudden and unexpected closing of the HOVENSA oil refinery; and WHEREAS, the closing of the HOVENSA oil refinery will result in the loss of employment of more than 2,000 residents of the Virgin Islands; and WHEREAS, the closing of the HOVENSA oil refinery is forecasted to result in more

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2012”. SECTION 2. (a) Title 33 Virgin Islands Code, chapter 111, section 3061; Title 22, chapter 10; and Act No. 6984, as amended, are each hereby amended by deleting “$50,000,000” and inserting “$10,000,000” in each instance it occurs. (b) The reduction set forth in subsection (a) of this section shall expire on September than $94,000,000 in lost revenues to the Treasury of the Virgin Islands; and WHEREAS, the Government of the Virgin Islands recognizes that it must find other means to supplement its budget for the remainder of the fiscal year to be able to continue to provide basic and needed services to the people of the Virgin Islands; and WHEREAS, the Employment Relation and Economic Recovery Act of 2012 provides the means whereby the Government can continue to provide basic and needed services to the people of the Virgin Islands; Now, Therefore, Be it enacted by the Legislature of the Virgin Islands: SECTION 1. Short Title. This Act may be referred to as the “Employment Relation and Economic Recovery Act of

30, 2015 such that a $50,000,000 balance shall be maintained in the Insurance Guaranty Fund. (c) Notwithstanding contrary provisions of Section 2 of Act No. 6984 or any other

law to the contrary, within twenty days after passage of this Act, the Virgin Islands Public Finance Authority shall terminate and cancel any letter of credit issued pursuant to Act No. 6984, as amended, and shall so notify the Commissioner of Finance and the Commissioner of Insurance upon termination and cancellation of such letter of credit. SECTION 3. (a) The Virgin Islands Public Finance Authority and the Governor, on behalf of the Government of the Virgin Islands, shall be authorized to borrow from a bank or other financial institution, or issue bonds or notes of other evidence of indebtedness, not

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inconsistent with section 8 of the Revised Organic Act of the Virgin Islands, to pay the payroll costs of the government, to pay outstanding income tax refunds for tax years up to and including 2010, and to pay the Hospitals and the Government’s outstanding debt to the Virgin Islands Water and Power Authority for Fiscal Year 2012. The amount borrowed to pay the

Government’s outstanding debt to the Virgin Islands Water and Power Authority for Fiscal Year 2012 shall not be less than $15,000,000. The amount borrowed to pay outstanding income tax refunds for tax years up to and including 2010 shall not be less than $15,000,000. (b) The Virgin Islands Public Finance Authority may lend the proceeds of the

borrowing to the Government of the Virgin Islands to pay the payroll costs of the government, to pay outstanding income tax returns, and to pay the Hospitals and the Government’s outstanding debt to the Virgin Islands Water and Power Authority for Fiscal Year 2012, and to enter into all necessary and appropriate agreements to carry out this subsection, on such terms and conditions as the Virgin Islands Public Finance Authority and the Government of the Virgin Islands agree are necessary or appropriate and are not inconsistent with this section and the Revised Organic Act of the Virgin Islands. (c) The final terms of such bonds, notes or other evidence of indebtedness shall be

approved by the Virgin Islands Public Finance Authority, provided that the aggregate principal amount of any authorized bonds, notes or other evidence of indebtedness for the purposes described herein: (1) Shall not exceed $120,000,000 in principal amount, to include associated

fees, charged and carrying costs, and may be issued in multiple series; (2) May be secured by or payable from, Internal Revenue Matching funds,

gross receipts taxes or property taxes, or other tax revenues, including the full faith and credit of the Government of the Virgin Islands, as necessary and sufficient, to repay the

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principal, redemption price, and interest on the bonds, notes or other evidence of indebtedness when due; provided, however, the Virgin Islands Public Finance Authority is hereby authorized to indebtedness issued hereunder; (3) (4) May be offered by public or private sale; May be in the form of a revolving line of credit with the option of

repayment through the future issuance of bonds; (5) Shall have a term not to exceed twenty (20) years from the date of

issuance of such bonds, notes or other evidence of indebtedness; and (d) The interest on the aggregate principal amount of any authorized bonds, notes or

other evidence of indebtedness for the purposes described herein shall not exceed nine (9) percent. (e) The Governor or the Governor’s designee shall submit to the Legislature a

quarterly report of the Government’s financial status starting from the enactment of this Act. The report shall include the following: (1) (2) whether or not cash flow problems exist or are imminent; actions taken by the Executive Branch or intended to be taken, to

adequately address the cash flow problems or the risks of imminent cash flow problems; (3) any government services or benefits likely to be adversely impacted by

existing or imminent cash flow problems; (4) the impact the existing or imminent cash flow problems may have on,

without limitation, the private sector, gas and energy rates, real estate values, tourism, public and private employment and other relevant areas of the Virgin Islands; (5) any public funds used or to be used pursuant to this section;

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(6) any notes, bonds or other evidence of indebtedness, or loans, to be entered

pursuant to this Act; and (7) any legislation required from the Legislative Branch necessary and proper

to further help address the existing or imminent financial emergency. SECTION 4. Notwithstanding any law to the contrary, the Tax Assessor of the Virgin Islands shall issue real property tax bills for all classes of real property, including residential and commercial, and collect such real property tax payments at the 1998 rate and assessment level for tax years 2009 through 2011. SECTION 5. (a) The Director of the Virgin Islands Bureau of Internal Revenue is authorized to implement a gross receipt tax early payment discount program for businesses that elect to pay estimated annual gross receipt taxes in advance of their due date. Businesses that take advantage of this program shall receive a ten (10) percent reduction of their estimated annual gross receipt taxes for the year(s) for which they elect to pay said taxes in advance of their due date. (b) The ten (10) percent early payment reduction in subsection (a) shall apply to both

delinquent and current annual estimated gross receipts taxes. (c) The Director of the Virgin Islands Bureau of Internal Revenue shall implement

this gross receipts tax early payment discount program by April 1, 2012 and said program shall expire on September 30, 2012. SECTION 6. Title 2 Virgin Islands Code, chapter 2, section 20 is amended by adding the following two sentences at the end thereof: “Beginning fiscal year 2015 and thereafter, the Governor shall submit a 24-month budget to the Legislature. In accordance with the mandates of title 2 Virgin Islands Code, chapter 2,

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2013”. SECTION 8. Act No. 7174, section 5, is repealed in its entirety. SECTION 9. Title 3 Virgin Islands Code, section 593 is amended as follows: (a) In subsection (d) by deleting the words “based on the approval of the agency or department head”. (b) In subsection (e) by inserting the words “automatic upon request” after the words “Participation in Voluntary Leave Without Pay is”, and by deleting the words “subject to the approval of the Agency or Department head”. SECTION 10. Title 17 Virgin Islands Code is amended in the following instances: (a) In chapter 34, section 490B (d) by adding the following language at the end “If section 24, the Governor shall submit this 24-month budget to the Legislature on or before May 30, 2014.” SECTION 7. Act No. 7248, section 3, is amended by deleting the words “until June 30,

the Board decides to approve the application, such decision shall be made subject to the Governor’s approval as set forth in this chapter, and in this event the Board shall submit all relevant data and all other requested data to the Governor along with its report for the Governor’s consideration”, and by adding a new section 490E to read as follows: “§490E Action by the governor Upon receiving a finding from the Board recommending an application for tenancy be approved, the Governor shall proceed to make his determination as to whether to approve the Board’s findings. If 60 calendar days, excluding Sundays and holidays, have elapsed from the date of official receipt at Government House in the capital of the Board’s findings, and the Governor has neither actively approved nor disapproved the issuance of benefits to the applicant,

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the issuance of said certificate shall be considered approved, and the board shall then proceed to issue the appropriate certificate.” (b) In chapter 43 as follows: 1. word “Board” 2. In section 806(g), add the following words at the beginning of the subsection In section 802 (a), third sentence, insert the words “and the Governor” after the

“Subject to approval of the Governor as provided in this chapter,” 3. Add a new section 806A to read as follows:

“§806A Action by the Governor Upon receiving a finding from the Board recommending a plan of operation of Protected Cell be approved, the Governor shall proceed to make his determination as to whether to approve the Board’s findings; and in this event the Board shall submit all relevant data and all other requested data to the Governor along with its report for the Governor’s consideration. If, after 60 calendar days excluding Sundays and holidays, have elapsed from the date of official receipt at Government House in the capital of the Board’s findings, the Governor has neither actively approved nor disapproved the plan of operation and issuance of benefits to the applicant, the plan of operation and issuance of benefits shall be considered approved, and the Board shall then proceed to issue the appropriate certificate.” 4. In section 810 (beginning paragraph) insert the following language after the word

“jurisdiction,” “or such information is requested by the Governor or any regulator or fiscal enforcement entities of the Government of the Virgin Islands including the Department of Finance, the Bureau of Internal Revenue, or the Attorney General,”.

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BILL SUMMARY This bill seeks to enact provisions to assist the Government to meet its current costs. Section 1 provides the short title for the Act. Section 2 reduces the Virgin Islands Insurance Guaranty Fund from $50,000,000 to $10,000,000 with a sunset clause requiring that on September 30, 2015, the Fund revert to maintaining a balance of $50,000,000, and provides that the Virgin Islands Public Finance Authority shall terminate and cancel any letter of credit issued pursuant to Act No.6984, as amended. Section 3 authorizes the Virgin Islands Public Finance Authority and the Governor, on behalf of the Government of the Virgin Islands to borrow $120,000,000 from a bank or other financial institution or the Government Employee Retirement System, or issue bonds, notes of other evidence of indebtedness, not inconsistent with section 8 of the Revised Organic Act of the Virgin Islands, to pay the payroll costs of the government, to pay outstanding income tax returns, and to pay the Hospitals and the Government’s debt to the Virgin Islands Water and Power Authority for Fiscal Year 2012. Section 3 also requires the Governor or the Governor’s designee to submit to the Legislature a quarterly report of the Government’s financial status starting from the enactment of the Act. Section 4 authorizes the Tax Assessor of the Virgin Islands to issue real property tax bills for all classes of real property, including residential and commercial, and to collect such real property tax payments at the 1998 rate and assessment level for tax years 2009 through 2011. Section 5 authorizes the Director of the Virgin Islands Bureau of Internal Revenue to implement a gross receipt tax early payment discount for businesses that elect to pay estimated annual gross receipt taxes in advance and provides that businesses that take advantage of this program shall receive a reduction of 10% of the estimated gross receipts taxes for the year(s) for

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BR12-1287/January 23, 2012/TF which they elect to pay said taxes in advance of their due date, and provides that the Director implement said program by April 1, 2012 which shall expire on September 30, 2012. Section 6 requires the Governor to submit a biennial budget to the Legislature beginning fiscal year 2015. Section 7 amends section 3 of Act No. 7248 to delete the sunset provision of June 30, 2013 as it relates to the increase in gross receipts taxes. Section 8 repeals Act No. 7174, section 5, in its entirety. Section 9 amends title 3 Virgin Islands Code, section 593 to provided that employees electing to participate in the Voluntary Leave Without Pay program shall be granted such leave upon request and such that the employee’s decision is not dependent upon department head approval. Section 10, internal section 1 sets time limits within which the Governor must take action on the proposal after it is approved by the Board. If the time limits are not adhered to it would be considered approved. In internal section 2 the same time limits are set as they pertain to the Research and Technology Park Protected Cell Corporation.

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