
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 48USC1574]

 
              TITLE 48--TERRITORIES AND INSULAR POSSESSIONS
 
                       CHAPTER 12--VIRGIN ISLANDS
 
                   SUBCHAPTER III--LEGISLATIVE BRANCH
 
Sec. 1574. Legislative powers and activities


(a) Scope of authority; limitation on enactments and taxation

    The legislative authority and power of the Virgin Islands shall 
extend to all rightful subjects of legislation not inconsistent with 
this chapter or the laws of the United States made applicable to the 
Virgin Islands, but no law shall be enacted which would impair rights 
existing or arising by virtue of any treaty or international agreement 
entered into by the United States, nor shall the lands or other property 
of nonresidents be taxed at a higher rate than the lands or other 
property of residents.

(b) Government bonds; maximum amount; sale, interest, etc.

    (i) The legislature of the government of the Virgin Islands may 
cause to be issued on behalf of said government bonds or other 
obligations for a public improvement or public undertaking authorized by 
an act of the legislature. Such bonds or obligations shall be payable 
solely from the revenues directly derived from and attributable to such 
public improvement, public undertaking, or other project. Bonds issued 
pursuant to paragraph (i) may bear such date or dates, may be in such 
denominations, may mature in such amounts and at such time or times, not 
exceeding thirty years from the date thereof, may be payable at such 
place or places, may carry such registration privileges as to either 
principal and interest, or principal only, and may be executed by such 
officers and in such manner as shall be prescribed by the government of 
the Virgin Islands. Said bonds may be redeemable (either with or without 
premium) or nonredeemable. In case any of the officers whose signatures 
appear on the bonds or coupons shall cease to be such officers before 
delivery of such bonds, such signature, whether manual or facsimile 
shall, nevertheless, be valid and sufficient for all purposes, the same 
as if such officers had remained in office until such delivery. The 
bonds so issued shall bear interest at a rate not to exceed that 
specified by the legislature, payable semiannually. All such bonds 
issued by the government of the Virgin Islands or by its authority shall 
be exempt as to principal and interest from taxation by the Government 
of the United States, or by the government of the Virgin Islands, or by 
any State, Territory, or possession or by any political subdivision of 
any State, Territory or possession, or by the District of Columbia. Such 
bonds shall under no circumstances constitute a general obligation of 
the Virgin Islands or of the United States.
    (ii)(A) Subject to the provisions of this paragraph (ii), the 
legislature of the government of the Virgin Islands may cause to be 
issued such negotiable general obligation bonds or other evidence of 
indebtedness, including but not limited to notes in anticipation of the 
collection of taxes or revenues, as it may deem necessary and advisable 
for any public purpose authorized by the legislature: Provided, That no 
such indebtedness of the Virgin Islands shall be incurred in excess of 
10 per centum of the aggregate assessed valuation of the taxable real 
property in the Virgin Islands. Bonds issued pursuant to this paragraph 
(ii) shall bear such date or dates, may be in such denominations, may 
mature in such amounts and at such time or times, not exceeding thirty 
years from the date thereof, may be payable at such place or places, may 
be sold at either public or private sale, may be redeemable (either with 
or without premium) or nonredeemable, may carry such registration 
privileges as to either principal and interest, or principal only, and 
may be executed by such officers and in such manner, as shall be 
prescribed by the legislature of the government of the Virgin Islands. 
In case any of the officers whose signatures appear on the bonds or 
coupons shall cease to be such officers before delivery of such bonds, 
such signature, whether manual or facsimile, shall nevertheless be valid 
and sufficient for all purposes, the same as if such officers had 
remained in office until such delivery. The bonds so issued shall bear 
interest at a rate not to exceed that specified by the legislature. All 
bonds issued by the government of the Virgin Islands, including 
specifically interest thereon, shall be exempt from taxation by the 
Government of the United States, or by the government of the Virgin 
Islands or any political subdivision thereof, or by any State, 
territory, or possession or by any political subdivision of any State, 
territory, or possession, or by the District of Columbia.
    (B) Bonds or other obligations issued pursuant to this paragraph 
(ii) shall not be a debt of the United States, nor shall the United 
States be liable thereon.
    (iii)(A) The legislature of the government of the Virgin Islands may 
cause to be issued after September 30, 1984, industrial development 
bonds (within the meaning of section 103(b)(2) \1\ of title 26).
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    \1\ See References in Text note below.
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    (B) Except as provided in subparagraph (C), any obligation issued 
under subparagraph (A) and the income from such obligation shall be 
exempt from all State and local taxation in effect on or after October 
1, 1984.
    (C) Any obligation issued under subparagraph (A) shall not be exempt 
from State or local gift, estate, inheritance, legacy, succession, or 
other wealth transfer taxes.
    (D) For purposes of this paragraph--
        (I) The term ``State'' includes the District of Columbia.
        (II) The taxes imposed by counties, municipalities, or any 
    territory, dependency, or possession of the United States shall be 
    treated as local taxes.

    (E) For exclusion of interest for purposes of Federal income 
taxation, see section 103 of title 26.

(c) Applicability of laws and ordinances; amendment or repeal

    The laws of the United States applicable to the Virgin Islands on 
July 22, 1954, including laws made applicable to the Virgin Islands by 
or pursuant to the provisions of the Act of June 22, 1936 (49 Stat. 
1807), and all local laws and ordinances in force in the Virgin Islands, 
or any part thereof, on July 22, 1954 shall, to the extent they are not 
inconsistent with this chapter, continue in force and effect until 
otherwise provided by the Congress: Provided, That the legislature shall 
have power, when within its jurisdiction and not inconsistent with the 
other provisions of this chapter, to amend, alter, modify, or repeal any 
local law or ordinance, public or private, civil or criminal, continued 
in force and effect by this chapter, except as herein otherwise 
provided, and to enact new laws not inconsistent with any law of the 
United States applicable to the Virgin Islands, subject to the power of 
Congress to annul any such Act of the legislature.

(d), (e) Repealed. Pub. L. 97-357, title III, Sec. 305, Oct. 19, 1982, 
        96 Stat. 1709

(f) Customs duty; duty-free importation; effect on other customs laws

    (1) The Legislature of the Virgin Islands may impose on the 
importation of any article into the Virgin Islands for consumption 
therein a customs duty. The rate of any customs duty imposed on any 
article under this subsection may not exceed--
        (A) if an ad valorem rate, 6 per centum ad valorem; or
        (B) if a specific rate or a combination ad valorem and specific 
    rate, the equivalent or 6 per centum ad valorem.

    (2) Nothing in this subsection shall prohibit the Legislature of the 
Virgin Islands from permitting the duty-free importation of any article.
    (3) Nothing in this subsection shall be construed as empowering the 
Legislature of the Virgin Islands to repeal or amend any provision in 
law in effect on the day before October 15, 1977, which pertains to the 
customs valuation or customs classification of articles imported into 
the Virgin Islands.

(July 22, 1954, ch. 558, Sec. 8, 68 Stat. 500; Pub. L. 85-851, Secs. 2, 
3, 10, Aug. 28, 1958, 72 Stat. 1094, 1095; Pub. L. 88-180, Nov. 19, 
1963, 77 Stat. 335; Pub. L. 89-643, Oct. 13, 1966, 80 Stat. 890; Pub. L. 
90-496, Sec. 15, Aug. 23, 1968, 82 Stat. 842; Pub. L. 95-134, title III, 
Sec. 301(c), Oct. 15, 1977, 91 Stat. 1163; Pub. L. 97-357, title III, 
Sec. 305, Oct. 19, 1982, 96 Stat. 1709; Pub. L. 98-454, title II, 
Sec. 201, Oct. 5, 1984, 98 Stat. 1732; Pub. L. 99-514, Sec. 2, Oct. 22, 
1986, 100 Stat. 2095; Pub. L. 106-84, Sec. 1(a), (b)(1), (2), Oct. 28, 
1999, 113 Stat. 1295.)

                       References in Text

    Section 103, referred to in subsec. (b)(iii)(A), which related to 
interest on certain governmental obligations was amended generally by 
Pub. L. 99-514, title XIII, Sec. 1301(a), Oct. 22, 1986, 100 Stat. 2602, 
and as so amended relates to interest on State and local bonds. Section 
103(b)(2), which prior to the general amendment defined industrial 
development bond, relates to the applicability of the interest exclusion 
to arbitrage bonds.
    Act of June 22, 1936 (49 Stat. 1807), referred to in subsec. (c), is 
act June 22, 1936, ch. 699, 49 Stat. 1807, as amended, known as the 
Organic Act of the Virgin Islands of the United States, which is 
classified generally to subchapter II (Sec. 1405 et seq.) of chapter 7 
of this title. For complete classification of this Act to the Code, see 
section 1406m of this title and Tables.


                               Amendments

    1999--Subsec. (b)(ii)(A). Pub. L. 106-84, Sec. 1(a), inserted ``, 
including but not limited to notes in anticipation of the collection of 
taxes or revenues,'' after ``other evidence of indebtedness'', 
substituted ``for any public purpose authorized by the legislature: 
Provided, That no such'' for ``to construct, improve, extend, better, 
repair, reconstruct, acquire, and equip hospitals, schools, libraries, 
gymnasia, athletic fields, sewers, sewage-disposal plants, and water 
systems: Provided, That no public'', and struck out ``and payable 
semiannually. All such bonds shall be sold for not less than the 
principal amount thereof plus accrued interest'' after ``specified by 
the legislature''.
    Subsec. (b)(ii)(B), (C). Pub. L. 106-84, Sec. 1(b)(1), (2), 
redesignated subpar. (C) as (B) and struck out former subpar. (B) which 
read as follows: ``The proceeds of the bond issues or other obligations 
herein authorized shall be expended only for the public improvements set 
forth in the preceding subparagraph, or for the reduction of the debt 
created by such bond issue or obligation, unless otherwise authorized by 
the Congress.''
    1986--Subsec. (b)(iii)(E). Pub. L. 99-514 substituted ``Internal 
Revenue Code of 1986'' for ``Internal Revenue Code of 1954'', which for 
purposes of codification was translated as ``title 26'' thus requiring 
no change in text.
    1984--Subsec. (b)(i), (iii). Pub. L. 98-454 struck out ``shall be 
sold at public sale and'' before ``may be redeemable'' in fourth 
sentence of par. (i) and added par. (iii).
    1982--Subsec. (d). Pub. L. 97-357 struck out subsec. (d) which 
authorized the President of the United States to appoint a commission of 
seven persons, at least three of whom were residents of the Virgin 
Islands, to survey the field of Federal statutes and to make 
recommendations to Congress within twelve months after July 22, 1954, as 
to which statutes of the United States not applicable to the Virgin 
Islands on that date should be made applicable to the Virgin Islands and 
which statutes of the United States applicable to the Virgin Islands on 
that date should be declared inapplicable, and provided compensation of 
this commission.
    Subsec. (e). Pub. L. 97-357 struck out subsec. (e) which related to 
arrangements by the Secretary of the Interior for the preparation of a 
code of laws of the Virgin Islands.
    1977--Subsec. (f). Pub. L. 95-134 added subsec. (f).
    1968--Subsec. (b)(i). Pub. L. 90-496 struck out the provisions that 
the total amount of revenue bonds which may be issued and outstanding 
for all improvements and undertakings at any one time shall not be in 
excess of $30,000,000, exclusive of all bonds and undertakings held by 
the United States as a result of a sale of real or personal property to 
the government of the Virgin Islands, and with not more than $10,000,000 
of such bonds or obligations to be outstanding at any one time for 
public improvements or public undertakings other than water or power 
projects, and substituted provisions that the bonds so issued shall bear 
interest at a rate not to exceed that specified by the legislature, 
payable semiannually, for provisions that the bonds so issued shall bear 
interest at a rate not to exceed 5% per annum, payable semiannually, and 
that all such bonds shall be sold for not less than the principal amount 
thereof plus accrued interest.
    1966--Subsec. (b)(i). Pub. L. 89-643 increased the borrowing 
authority of the Virgin Islands by striking out limiting provisions so 
as to require only that the object of a bond issue be a public 
improvement or undertaking authorized by the legislature as opposed to 
previous requirement of a legislative authorization for specific 
improvements and legislative findings of need, substituted provisions 
authorizing the issuance of bonds that are nonredeemable or redeemable 
(either with or without premium) for provisions requiring that bonds be 
redeemable after five years without premium, raised the limitation on 
total amount of outstanding bonds from a flat limitation of $10,000,000 
to $30,000,000 exclusive of all bonds or obligations which are held by 
the Government of the United States as a result of a sale of real or 
personal property to the government of the Virgin Islands, and inserted 
requirement that not to exceed $10,000,000 of the bonds or obligations 
may be outstanding at any one time for public improvement or public 
undertakings other than water or power projects.
    1963--Subsec. (b). Pub. L. 88-180 redesignated existing provisions 
as par. (i), struck out ``The legislature shall have no power to incur 
any indebtedness which may be a general obligation of said government'', 
and added par. (ii).
    1958--Subsec. (a). Pub. L. 85-851, Sec. 2, substituted ``rightful 
subjects of legislation'' for ``subjects of local application''.
    Subsec. (b). Pub. L. 85-851, Sec. 10, authorized issuance of bonds 
for establishment, construction, operation, maintenance, reconstruction, 
improvement, or enlargement of other projects and payment of the bonds 
from revenues derived from the projects.
    Subsec. (e). Pub. L. 85-851, Sec. 3, struck out ``and any 
supplements to it'' after ``Upon the enactment of the Virgin Islands 
Code it''.


                    Effective Date of 1999 Amendment

    Pub. L. 106-84, Sec. 3, Oct. 28, 1999, 113 Stat. 1295, provided 
that:
    ``(a) In General.--Except as provided by subsection (b), the 
amendments made by section 1 [amending this section and section 1574a of 
this title] shall apply to those instruments of indebtedness issued by 
the Government of the Virgin Islands after the date of the enactment of 
this Act [Oct. 28, 1999].
    ``(b) Effect of Failure To Reach Agreement.--If the agreement 
authorized in section 2(a) [set out as a note under section 1631 of this 
title] 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.''


                    Effective Date of 1968 Amendment

    Section 15 of Pub. L. 90-496 provided that the amendment made by 
that section is effective on date of enactment of Pub. L. 90-496, which 
was approved Aug. 23, 1968.


                              Construction

    Pub. L. 106-84, Sec. 4, Oct. 28, 1999, 113 Stat. 1296, provided 
that: ``These amendments to the Revised Organic Act of the Virgin 
Islands [amending this section] 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 [26 
U.S.C. 149(c)] (which requires the new bonds comply with the appropriate 
requirements of the Internal Revenue Code).''


  Levying and Collection of Excise Taxes by Legislature of the Virgin 
                                 Islands

    Pub. L. 96-205, title IV, Sec. 405, Mar. 12, 1980, 94 Stat. 89, as 
amended by Pub. L. 97-357, title III, Sec. 302, Oct. 19, 1982, 96 Stat. 
1709, provided that: ``Any excise taxes levied by the Legislature of the 
Virgin Islands may be levied and collected as the Legislature of the 
Virgin Islands may direct as soon as the articles, goods, merchandise, 
and commodities subject to said tax are brought into the Virgin Islands. 
The officials of the Customs and Postal Services of the United States 
are directed to assist the appropriate officials of the United States 
Virgin Islands in the collection of these taxes.''

                  Section Referred to in Other Sections

    This section is referred to in section 1574a of this title.
