Tag: Finance

Immediate Release – Finance Committee Resumes Budget Hearings on Tuesday, July 10, 2018

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For Immediate Release
July 9, 2018

St. Croix—The Committee on Finance resumes budget hearings tomorrow, Tuesday. July 10, 2018 in the Earle B. Ottley Legislative Hall on St. Thomas.
The Committee is scheduled to consider three departmental Fiscal Year 2019 Budget Proposals beginning with the Department of Justice at 9:00 a.m.;, 1:00 PM, Public Services Commission and at 3:00 PM the Bureau of Internal Revenue.

Committee on Finance

Chair: Senator Kurt Vialet
Vice-Chair: Senator Marvin A. Blyden

Location: Earle B. Ottley Legislative Hall
St. Thomas, Virgin Islands

Agenda
The Committee on Finance has scheduled a budget hearing to receive testimony from the
following departments and agencies on the Fiscal Year 2018 budget appropriations.

9:00 A.M. VIRGIN ISLANDS PUBLIC EMPLOYMENT RELATIONS BOARD
VIRGIN ISLANDS LABOR MANAGEMENT

Invited Testifiers: Ms. Pierina Jacobs-Feldman
Chairperson

Mr. Aubrey A. Lee
Executive Director

12:00 P.M. LUNCH

1:00 P.M. OFFICE OF VETERAN’S AFFAIRS

Invited Testifier: Mr. Patrick D. Farrell
Director

Committee on Finance

Chair: Senator Kurt Vialet
Vice-Chair: Senator Marvin A. Blyden

Location: Frits E. Lawaetz Legislative Conference Room
St. Croix, Virgin Islands

Agenda
The Committee on Finance has scheduled a budget hearing to receive testimony from the
following departments and agencies on the Fiscal Year 2018 budget appropriations.

 

9:00 A.M. DEPARTMENT OF PROPERTY & PROCUREMENT

Invited Testifier: Honorable Lloyd Bough
Commissioner

12:00 P.M. LUNCH

1:00 P.M. BUREAU OF INTERNAL REVENUE

Invited Testifier: Honorable Marvin L. Pickering, EA, PHR, ATA, ATP
Director

3:00 P.M. VIRGIN ISLANDS TAXICAB COMMISSION

Invited Testifier: Mr. Levron Sarauw
Executive Director

FINANCE COMMITTEE VOTES FAVORABLY FOR SIN TAX MEASURES

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The Committee on Finance, Chaired by Sen. Kurt Vialet, met to receive testimony on and reconsider Bill Nos. 32-0005 and 32-0007 – both bills regarding the Government’s Five-Year Financial Plan – following an early morning protest from members of the private sector who oppose the measures.

Testimonies given by private citizens and the Governor’s financial team conveyed the serious implications if the territory continues to plunge further into fiscal collapse. “At this point, a series of bad decisions were made, without thinking about the future generations,” stated Sen. Vialet.

Bill No. 32-0005, proposed by Sen. Neville James, Sen. Kurt Vialet, Sen. Nereida Rivera-O’Reilly and Sen. Myron D. Jackson, was passed favorably 5 to 2. Voting in favor were Sens. James, O’Reilly, Vialet, Brian A. Smith, and Marvin A. Blyden. The Bill seeks to amend and enhance revenues for the Territory by implementing excise taxes on tobacco products, alcohol beverages and on sugar carbonated beverages, and the establishment of a new timeshare fee. The Virgin Islands Code currently includes a timeshare occupancy tax of 10.5%.

The Bureau of Internal Revenue (“BIR”) will assess on and collect from timeshare owners the existing hotel room occupancy tax of 12.5%. Accordingly, Title II of the bill would repeal the timeshare occupancy tax. In addition, the Act establishes a new timeshare fee, the Environmental/Infrastructure Impact Fee, in the amount of $25.00 per day of occupancy of any timeshare in the Virgin Islands.

The measure also authorizes revenues generated from the Environmental/Infrastructure Impact Fee to be allocated as follows: 25% to the Virgin Islands Tourism Advertising Revolving Fund, 50% to the General Fund and 25% to the Hospitals. Section 3 significantly amends Title 33, chapter 3, section 42, which establishes the rates and base for certain excise taxes on imported goods. As currently in effect, the statute imposes very low tax rates on most liquor and tobacco products. Imported beers, for example, are taxed at a rate of $2.08 (for foreign beers) or $1.55 (for U.S. beers) per case or each 24 bottles Whiskies and other liquors are generally taxed at a rate of just $6.00 per case.

The purposed increases in the excise tax rates on liquor and tobacco will provide the benefits of both increasing revenue and supporting public health. Products on which the 20 excise tax rates will include:

Foreign and U.S. beers, from $2.08 and $1.55 per case, respectively, to $6.08 and $5.00; and Cigarettes, from 45% to 45% plus $8.00 per cartoon; and Carbonated beverages, from 3% plus $0.36 per case plus $0.005 per fluid ounce (except those in reusable canisters, which will now be taxed at 4%); For most spirits and liqueurs from $6.00 per case (or $2.50 per wine gallon, if greater) to 10% of value; and for wines and brandies, from $2.04 per case (or $0.85 per wine gallon, if greater) to 10% of value. Cumulatively, the proposed excise tax rate increases, are projected to generate approximately $12.2 million in new revenues annually. Chairman Vialet added that these items in which the taxes are proposed, are not necessities or essential for our consumption.

Bill No. 32-0007, proposed by Sen. Myron D. Jackson and Sen. Nereida Rivera O’Reilly, was passed favorably 5 to 2. Voting in favor were Sens. O’Reilly, Jackson, Vialet, Blyden and Smith. This Bill seeks to amend by adding the following language at the end: ‘Commercial real property includes buildings with residences of 5 or more units,’ and Subsection 2301 is amended to include a new subsection to read: ‘In no event, may the application of exemptions and credits reduce the amount of tax due for any real property to an amount less than $360.’ “Times have changed, so there’s no way we can sit here, do nothing, and believe we will be able to move forward and solve our problems.” said Chairman Vialet.

The Bills were both passed favorably to the Committee on Rules & Judiciary for further consideration.

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LAWMAKERS CONSIDER BILL TO REQUIRE CREDIT UNIONS IN THE TERRITORY TO BE FEDERALLY CHARTERED

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dsc_3831ST. THOMAS- Members of the Committee on Finance, chaired by Sen. Clifford Graham, held a meeting at the Capitol Building on Thursday, to receive testimony on several bills including Bill No. 31-0369; as it relates to the establishment of credit unions and for their oversight.
Gwendolyn Hall Brady, Division Director for the Division of Banking and Insurance said, “Our safest course of action is to require all credit unions be federally chartered and come within preview of the National Credit Union Administration (NCUA).”
Some of the responsibilities of the NCUA are the issuance of interpretative rulings, financial performance reports, legal opinion letters, strict rules and regulations, reviews every three years, and the ability to examine chartered credit unions and issue Administrative Orders when it finds that a credit union or persons affiliated with credit union is in violation of the law, according to Director Brady.
“In your testimony, you mentioned the annual oversight visits of the credit unions by external auditors,” said Sen. Graham, Sponsor of the Bill. “How often are the audits conducted?” he asked. In response, Director Brady said, “The audits are conducted once a year by external and federal auditors. Upon completion, the reports are sent to NCUA for further review.”
Sen. Tregenza Roach said, “NCUA regulation comes with a cost.” He asked, “What costs are affiliated with NCUA?” Brady stated that there are fees that must be paid to NCUA. The formula is based on the risk associated with a particular credit union. The financial portfolio and losses will determine the cost per credit union.
Chief Executive Officer Keisha Prince, NCRM, NCBSO added, “Although, NCUA can be difficult because it comes with a cost. However, their oversight ensures sounds management of credit unions. NCUA performs regulatory services and evaluate credit unions based on capital adequacy, management responsibilities, earnings, liquidity and market sensitivity.”
Sen. Marvin Blyden said, “I support this legislation because it is gives the Territory an upgrade by raising the standards of the credit unions. More importantly, it provides financial protection to the people of the Virgin Islands.
Similarly, Sen. Sammuel Sanes said, “This is one of those bills that makes plain sense.” He asked, “Were the victims of Her Majesty Credit Union reimbursed for their loss?” Director Brady said, “If Her Majesty Credit Union had been a legitimate operation and established under a federal charter through NCUA, then its accounts would have been insured by the National Credit Union Share Insurance Fund, therefore, consumer interests would have been protected.”

Sen. Positive Nelson said, “Updating our laws to keep us in alignment is a very good thing. However, my main issue is that credit unions should have never been authorized by the Department of Licensing and Consumer Affairs because jurisdiction should be under the Division of Banking. If this was the case, regulation of Her Majesty Credit Union would not have slipped through the cracks.”
Ultimately, lawmakers voted favorably for Bill No. 31-0369.
The following measures were also considered and approved:
– Bill No. 31-0443 – An Act amending Title 22 Virgin Islands Code adding Chapter 20 to enact “The Virgin Islands Risk-Based Capital for Insurers Act”
– Bill No. 31-0444 – An Act repealing Title 22 Virgin Islands Code Section 1251(a) and adding Chapter 14 entitled “The Virgin Islands Insurance Holding Company System Regulatory Act” to meet the accreditation standards established by the National Association of Insurance Commissioners and update the insurance laws of the Territory placing them on par with other United States jurisdictions, and providing greater and more effective protection for the policyholders of the Territory

– Bill No. 31-0445 – An Act repealing and re-enacting Title 22 Virgin Islands Code chapter 31 to enact the “Virgin Islands Producer and Adjuster Licensing Act”
– Bill No. 31-0446 -An Act amending Title 22 Virgin Islands Code adding Chapter 60 to enact “The Virgin Islands Third Party Administrators Act”, updating the insurance laws of the Territory to reflect the licensing requirements contained in the model laws of the National Association of Insurance Commissioners
– Bill No. 31-0398- An Act repealing title 33, Virgin Islands Code, chapter 12, section 525 relating to the rate of duty on articles shipped from within the U.S. Customs Zone.
– Bill No. 31-0442 -An Act amending the Virgin Islands Code Title 3, 9, and 22 to update the Insurance Laws of the Territory and to adopt the Core Standards and Model Laws and Regulations as established by the National Association of Insurance Commissioners (“NAIC”) for purposes of obtaining accreditation with the NAIC, placing the Territory on par with other United States jurisdictions and attaining greater and more effective protection for the policyholders of the Territory
All bills approved will be forwarded to the Committee on Rules and Judiciary for further
consideration.
Senators present are Clifford Graham, Novelle Francis, Marvin Blyden, Myron Jackson, Sammuel Sanes, Positive Nelson, Tregenza Roach, Nereida O’Reilly and Kurt Vialet.
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COMMITTEE HOLDS BILL FOR JUDICIARY RETIREMENT BENEFITS PROGRAM

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ST.THOMAS—The Committee on Finance, chaired by Sen. Clifford F. Graham, met Wednesday at the
Earle B. Ottley Legislative Hall, where they held a measure regarding the retirement benefit program for
members of the Judiciary and for other related purposes.
Bill No. 31-0244, sponsored by Sen. Kenneth L. Gittens, repeals a section of the code (770l) and
reintroduces an amended version that clarifies ambiguities relative to annuities, vesting periods, and
removes Government Employees Retirement System’s authority over deferred compensation. Legislators
moved to hold the measure. It was so ordered without objection.
“The law provides that their compensation, to include their pension benefits, are not to be changed midstream
of their term,”explained Sen. Gittens. “We have been seeing some changes and this bill seeks to
clarify what is happening. We need to realize that these individuals who serve as judicial officers are
people who we call upon to be fair and just in their decision making and it is only right for us to ensure
that the fair and just decision making occurs for all aspects,” he said.
Sen. Graham asked officials to explain the effect of increasing the cost of insurance.
“If the cost of insurance for members of the Government of the Virgin Islands increases, you are saying
that that’s in violation of the law with respect to judge’s salary, he asked.
Robert Molloy, who serves as a Judge of the Superior Court of the Virgin Islands, clarified that in other
jurisdictions with similar legislation, “you cannot reduce the take home compensation of a judicial
officer”.
Other lawmakers weighed in.
“What we’re discussing is an unfunded liability,” said Sen. Vialet. “I think we’re going to have to make
the determination today as to whether or not, once again, the Legislature is going to enter into [another]
unfunded liability and the system at a later point, will point out that the mandate was unfunded,” he said.
Members of the judiciary present spoke in favor of the measure and provided some recommendations for
areas in the proposed amendments to tighten the language, removing any residual ambiguity.
“Although one of the core purposes of Bill No. 31-0244 is to eliminate GERS’ ability to set contribution
rates for members of the Judiciary,” said Hon. Rhys S. Hodge, Chief Justice of the Supreme Court of the
Virgin Islands “reference to retirement contribution payments from the employer could be interpreted to
allow GERS to require such a payment.”
“This not only undercuts the purpose of Bill No.31-0244, but poses serious constitutional questions as to
its legality if applied retroactively to the current members of Tier I,” he said.
Changing the language to reflect a contribution rate change from 15% to 11% for contributions paid by
Tier I members would resolve that conflict, Justice Hodge added.

Austin L. Nibbs, Administrator at GERS also weighed in.
“We are extremely concerned that this piece of legislation, which we term as ‘Special Interest Legislation’
is being offered at time when there is an ongoing appeal hearing related to the same issues before the
Board with a sitting member of the Judiciary,” he said.
Others present disagreed with Nibbs however, pointing out that the legislation was presented before the
appeal hearing began. Senators also added that they expected to hear more than the generic response of
insolvency by 2023.
“We just cannot continue to set rates based on a particular argument and then knowing that it’s going to
come back to haunt the Government of the Virgin Islands. All of those previous [pieces of] legislation is
what destroyed the Government Employees Retirement System,” Vialet said.
The committee also held Bill No. 31-0459 relating to the distribution of the proceeds of taxes collected
and deposited into the Virgin Islands Sin Taxing Revolving Fund and Bill No. 31-0441, establishing the
office of the public surveyor.

Committee Chair, Sen. Clifford F. Graham and members, Senators Marvin A. Blyden, Positive T.A.
Nelson, Tregenza A. Roach and Kurt A. Vialet, were present. Non-committee members Senators Kenneth
L. Gittens and Novelle E. Francis Jr., were also present.

 

Contact: Saida Harrigan
sharrigan@legvi.org

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