[Congressional Record (Bound Edition), Volume 145 (1999), Part 16]
[House]
[Pages 22827-22829]
[From the U.S. Government Publishing Office, www.gpo.gov]



          GRANTING THE VIRGIN ISLANDS GREATER FISCAL AUTONOMY

  Mr. SAXTON. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 2841) to amend the Revised Organic Act of the Virgin Islands 
to provide for greater fiscal autonomy consistent with other United 
States jurisdictions, and for other purposes, as amended.
  The Clerk read as follows:

                               H.R. 2841

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. GREATER FISCAL AUTONOMY.

       (a) Issuance.--Section 8(b)(ii)(A) of the Revised Organic 
     Act of the Virgin Islands (48 U.S.C. 1574(b)(ii)(A)) is 
     amended--
       (1) in the first sentence, by inserting after ``other 
     evidence of indebtedness'' the following: ``, including but 
     not limited to notes in anticipation of the collection of 
     taxes or revenues, '';
       (2) by striking ``to construct, improve, extend'' and all 
     that follows through ``Provided,

[[Page 22828]]

     That no public'' and inserting ``for any public purpose 
     authorized by the legislature: Provided, That no such''; and
       (3) by striking ``and payable semiannually. All such bonds 
     shall be sold for not less than the principal amount thereof 
     plus accrued interest''
       (b) Technical Corrections and Conforming Amendments.--
       (1) Repeal.--Section 8(b)(ii)(B) of the Revised Organic Act 
     of the Virgin Islands (48 U.S.C. 1574(b)(ii)(B)) is repealed.
       (2) Redesignation.--Section 8(b)(ii)(C) of the Revised 
     Organic Act of the Virgin Islands (48 U.S.C. 1574(b)(ii)(C)) 
     is redesignated as section 8(b)(ii)(B).
       (3) Redundant provision.--Section 1 of Public Law 94-392 
     (90 Stat. 1193) is amended by striking subsection (d).

     SEC. 2. AGREEMENT.

       (a) In General.--The Secretary of the Interior is 
     authorized to enter into an agreement with the Governor of 
     the Virgin Islands establishing mutually agreed financial 
     accountability and performance standards for the fiscal 
     operations of the Government of the Virgin Islands.
       (b) Transmission to Congress.--Upon ratification of the 
     agreement authorized in subsection (a) by both parties, the 
     Secretary shall forward a copy of the agreement to the 
     Committee on Resources in the House of Representatives and 
     the Committee on Energy and Natural Resources in the Senate.

     SEC. 3. EFFECTIVE DATES.

       (a) In General.--Except as provided by subsection (b), the 
     amendments made by section 1 shall apply to those instruments 
     of indebtedness issued by the Government of the Virgin 
     Islands after the date of the enactment of this Act.
       (b) Effect of Failure To Reach Agreement.--If the agreement 
     authorized in section 2(a) is not ratified by both parties on 
     or before December 31, 1999, the amendments made by section 
     1--
       (A) shall not apply to instruments of indebtedness issued 
     by the Government of the Virgin Islands on or after December 
     31, 1999; and
       (B) shall continue to apply to those instruments of 
     indebtedness issued by the Government of the Virgin Islands 
     after the date of the enactment of this Act and before 
     December 31, 1999.

     SEC. 4. CONSTRUCTION.

       These amendments to the Revised Organic Act of the Virgin 
     Islands are not intended to modify the internal revenue laws. 
     Thus, the bonds authorized by this bill must comply with 
     subsection (c) of section 149 of the Internal Revenue Code of 
     1986 (which requires the new bonds to comply with the 
     appropriate requirements of the Internal Revenue Code).

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New 
Jersey (Mr. Saxton) and the gentlewoman from the Virgin Islands (Mrs. 
Christensen) each will control 20 minutes.
  The Chair recognizes the gentleman from New Jersey (Mr. Saxton).
  Mr. SAXTON. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I would like to commend the gentlewoman from the Virgin 
Islands (Mrs. Christensen) for the great work that she has done in 
bringing this bill to the floor today.
  Mr. Speaker, I rise in support of H.R. 2841, to amend the Revised 
Organic Act of the Virgin Islands to provide for greater fiscal 
autonomy consistent with other United States jurisdictions. This bill 
will allow the Government of the Virgin islands to use new, flexible 
bonding authority to help them out of their current dire financial 
crisis. The new authority is conditioned on the Virgin Islands entering 
into an agreement committing to financial accountability and 
performance standards. This updated bonding authority is one way 
Congress can help the Virgin Islands to help themselves resolve their 
financial problems.
  H.R. 2841 provides for: The Virgin Islands to enjoy the same fiscal 
authority of other states and territories for the issuance of general 
obligation bonds; a financial accountability and performance standards 
agreement to be concluded by the Government of the Virgin Islands and 
the Department of Interior; and the additional bonding authority to 
terminate if the financial accountability and performance standards 
agreement is not concluded by December 31, 1999.
  Members should know that the amendments to the Virgin Islands Organic 
Act made by this bill are not intended to modify the internal revenue 
laws. Thus, the bonds authorized by H.R. 2841 must comply with 
subsection (c) of section 149 of the Internal Revenue Code of 1986. I 
thank Chairman Archer of the Ways and Means Committee and his staff as 
well as the Joint Committee on Taxation for their extraordinary 
cooperation in helping to schedule this bill today.
  I urge my colleagues to support this measure.
  Mr. Speaker, I reserve the balance of my time.
  Mrs. CHRISTENSEN. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I would like to thank the gentleman from New Jersey (Mr. 
Saxton) for his kind remarks and for joining me on the floor this 
afternoon for an explanation of H.R. 2481, to provide the Virgin 
Islands with greater fiscal autonomy consistent with other United 
States jurisdictions.
  I want to thank the gentleman from Alaska (Mr. Young), chairman, and 
the gentleman from California (Mr. George Miller), the ranking member, 
for their support on this bill and for their willingness to assist the 
Virgin Islands generally to recover from our fiscal difficulties.
  Mr. Speaker, the Governor of the Virgin Islands requested that I 
introduce H.R. 2481 to make it less expensive for his administration to 
close on a planned financing to meet currently due obligations as well 
as to provide sufficient cash reserves to operate the territorial 
government while his deficit reduction plan and budget initiatives take 
effect.
  Usually matters such as this one relating to the bonding authority to 
a particular State or territory are defined by local law. However, in 
the case of my district, the U.S. Virgin Islands, we have not yet 
adopted a constitution, and the Federal law which acts as our 
constitution does not give us the same general obligation bonding 
authority enjoyed by other local jurisdictions; thus the need for this 
bill which was reported out of Committee on Resources by a unanimous 
vote.
  I also want to take this opportunity to discuss briefly the overall 
financial picture of the U.S. Virgin Islands, as further background.
  We are presently wrestling with a large cumulative deficit which has 
developed over the last 10 years and an annual operating deficit which 
has brought the Territory close to the bridge of fiscal collapse. The 
causes are many, both internal and external.
  As my colleagues know, we have been the victim of a series of 
hundred-year hurricanes which came at such a rate and pace that we have 
never been able to completely recover.
  The toll that these natural disasters took on the private sector 
placed an extra burden on an already over-bloated government sector and 
increased the obstacles to our struggle to downsize or right-size.
  Even though government revenues are still not where they should be 
because of the problems yet being faced by our private sector, steps 
are being put in place to reduce government spending and increase 
revenues in order to begin to reduce our deficit. Initiatives are also 
in progress to stimulate our economy.
  The bill before us today is an important part of this effort. But 
there are other important areas in which we look to Congress for 
support and assistance.
  The first is lifting the current cap on the return of Federal excise 
taxes on Virgin Islands-produced rum, as provided for in our Organic 
Act, or our working constitution. I cannot overstate the importance of 
the funds that lifting the rum cap would provide to the Virgin Islands. 
It is essential that we receive these additional funds if we are to 
have any success at all in recovering from the current fiscal crisis.
  We have certainly appreciated the passage of my bill to revive a 
watch industry that has been the mainstay of employment for many on the 
island of St. Croix, and I thank my colleagues, but that will not be 
enough.
  We also need for my colleagues to provide full funding to the 
territories under the Children's Health Insurance Program or CHIP. Full 
funding under CHIP to the territories, based on our populations, was 
proposed by the administration when the program first began. However, 
decisions made by this body as a result of the Balanced Budget Act of 
1997, provided us with less than what is necessary to ensure that our 
children receive medical care, and this causes an undue strain on our 
already beleaguered local treasury.

                              {time}  1645

  Mr. Speaker, my colleague, the gentleman from Puerto Rico (Mr. 
Romero-

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Barcelo), and I have a bill to provide full funding for the territories 
under CHIP, and I hope that all my colleagues will support its passage.
  There are incipient discussions on several other initiatives for 
which, when further researched and developed, we may ask later for your 
assistance and support as well.
  Mr. Speaker, H.R. 2841 would allow the government of the Virgin 
Islands to avoid a costly two-step financing arrangement. In the 
absence of such legislation, the outdated limitations in the 
Government's general obligation authority would cause the government of 
the Virgin Islands to incur extraordinary costs in excess of $6 million 
in order to complete this process.
  Additionally, the new authority that the bill provides will expire on 
December 31, 1999, if the government of the Virgin Islands and the 
Secretary of the Interior do not reach an agreement on various fiscal 
and accountability standards for reducing the islands' deficit. I urge 
my colleagues to support this bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SAXTON. Mr. Speaker, I yield myself such time as I may consume to 
note that, as the gentlewoman has just pointed out, this is a bill 
which is intended to provide, we hope, the economic stimulus necessary 
for the Virgin Islands to do a better job economically in order to 
benefit the constituents of the gentlewoman from the Virgin Islands 
(Mrs. Christensen).
  But beyond that, I would like to say that the gentlewoman has worked 
so hard to bring this bill to the floor, and I hope that her 
constituents are mindful of the great effort that she has put into this 
bill. So, Mr. Speaker, at this time I would just like to commend her 
for it and ask all my colleagues to support the bill.
  Mr. Speaker, I have no further requests for time, and I yield back 
the balance of my time.
  Mrs. CHRISTENSEN. Mr. Speaker, I yield myself such time as I may 
consume to just thank again the gentleman from Alaska (Mr. Young), the 
ranking member of the committee, the gentleman from California (Mr. 
George Miller), and my colleague, the gentleman from New Jersey (Mr. 
Saxton), as well as my staff and the staff of the committee for the 
hard work in assisting me to get this bill to the floor today.
  Mr. UNDERWOOD. Mr. Speaker, I rise to speak in favor of H.R. 2841 
which provides the U.S. Virgin Islands (USVI) greater fiscal autonomy. 
I commend my colleague, Representative Donna Christensen for ensuring 
that the voices of the people of the USVI are heard in Congress. I also 
thank Chairman Don Young and Ranking Member George Miller for making 
certain that this legislation moved quickly and without resistance 
through the Committee.
  As is the condition with most other U.S. Territories, such as Guam, 
American Samoa, and the Commonwealth of the Northern Marianas Islands, 
the USVI is also experiencing financial difficulties. For the past 
several years, while the U.S. has been able to boast of low 
unemployment and increased revenues, the U.S. territories have not been 
as fortunate. For the economies of Guam and the CNMI, which are largely 
dependent on tourism, our downturn has been a condition of Asia's 
financial crisis. Other Territories remain diligent and continue to 
explore new ways to attract businesses to their island. The USVI, 
however, has been placed at a disadvantage of providing themselves the 
opportunity for more economic activity.
  H.R. 2841 will help with USVI get back on their feet and provide them 
the opportunity to diversify and expand their economic opportunities. 
This same authority exists with other U.S. Territories but was not 
included in USVI's Revised Organic Act. H.R. 2481 corrects this 
oversight and extends them the ability already enjoyed by the other 
territories.
  I encourage my colleagues to vote in favor of H.R. 2481.
  Mrs. CHRISTENSEN. Mr. Speaker, I have no further requests for time, 
and I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Upton). The question is on the motion 
offered by the gentleman from New Jersey (Mr. Saxton) that the House 
suspend the rules and pass the bill, H.R. 2841, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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