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# Legislative Bulletin...........................................January 17, 2007

H.R. 57 --- To repeal outdated federal law limiting the Virgin Islands'
authority to assess and collect its property taxes--- *as introduced*

(*Christensen, D-VI*)

**[Order of Business]{.underline}:** The bill is scheduled for
consideration on Wednesday, January 17, 2007, under a motion to suspend
the rules and pass the bill.

**[Summary]{.underline}:** H.R. 57 would repeal specific provisions
pertaining to real property taxation in the U.S. Virgin Islands, and
deems this amendment to have taken effect on July 22, 1954.
Specifically, it would repeal Sections 1 through 6 of the Act of May 26,
1936 (Chapter 450; 49 Stat. 1372-1373; 48 U.S.C. 1401-1401e).

**[Additional Background]{.underline}:** According to various sources,
the 1936 statute was enacted to address the tax policies of the
Danish-era municipal councils in the Virgin Islands. The 1936 statute
was repealed in 1954, but reinstated two years ago by the Third Circuit
Federal Court of Appeals, requiring that all real property be taxed at
the same rate without regard to classification or use. In effect, this
decision struck down a local statute limiting the amount of increase in
the assessment of residential real property in any assessment period
(and therefore any increase in the property tax owed).

According to Vargrave Richards, the Lieutenant Governor of the United
States Virgin Islands, speaking before the Senate Committee on Energy
and Natural Resources in 2005, the "1936 Statute" (as it is referred to
in the Virgin Islands) is an outdated policy that should be repealed. In
his testimony, Mr. Richards state, "I strongly support the Bill for
three reasons: One, a recent court ruling held that the 1936 Statute
prohibits the Territory from setting its own real property tax policy;
Two, the 69 year old statute, which was designed to assist the Virgin
Islands, now hinders it from performing a basic governmental function;
and Three, this is a purely local issue with no federal impact."

For additional information and to view Senate Committee testimony from
2006, visit:
<http://www.energy.senate.gov/public/index.cfm?FuseAction=Hearings.Testimony&Hearing_ID=1506&Witness_ID=4300>.

**[Committee Action]{.underline}:** H.R. 57 was introduced on January 4,
2007, and referred to the Committee on Natural Resources, which took no
official action.

**[Cost to Taxpayers]{.underline}:** A CBO score of H.R. 57 is
unavailable, but the bill does not authorize new expenditures.

**[Does the Bill Expand the Size and Scope of the Federal
Government?]{.underline}:** No.

**[Does the Bill Contain Any New State-Government, Local-Government, or
Private-Sector Mandates?]{.underline}:** No.

**[Constitutional Authority]{.underline}:** A committee report citing
constitutional authority is unavailable.

House Rule XIII, Section 3(d)(1), requires that all committee reports
contain "a statement citing the *specific* powers granted to Congress in
the Constitution to enact the law proposed by the bill or joint
resolution." *\[emphasis added\]*

**[RSC Staff Contact]{.underline}:** Derek V. Baker;
[derek.baker@mail.house.gov](mailto:Derek.baker@mail.house.gov);
202-226-8585

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