An Act to authorize the government of the Virgin Islands to issue bonds in anticipation of revenue receipts and to authorize the guarantee of such bonds by the United States under specified conditions, and for other purposes.
PL 94-392 (H.R.13359), enacted 08/19/1976

PUBLIC LAW 94-392—AUG. 19, 1976 
90 STAT. 1193 
Public Law 94-392 
94th Congress 
An Act 
To authorize the government of the Virgin Islands to issue bonds in anticipation 
of revenue receipts and to authorize the guarantee of such bonds by the United 
States under specified conditions, and for other purposes. 
Be it enacted hy the Senate and House of Representatives of the 
United States of America in Congress assembled^ That (a) in addition 
to the authority conferred by section 8(b) of the Revised Organic Act 
of the Virgin Islands (48 U.S.C. 1574(b)), the legislature of the gov-
ernment of the Virgin Islands is authorized to cause to be issued bonds 
or other obligations of such government in anticipation of revenues to 
be received under section 28(b) of such Act (26 U.S.C. 7652). The 
proceeds of such bonds or other obligations may be used for any pur-
pose authorized by an act of the legislature. The legislature of the 
government of the Virgin Islands may initiate, by majority vote of 
the members, a binding referendum vote to approve or disapprove 
the amount of any such bond or other obligation and/or any purpose 
for which such bond or other obligation is authorized. 
(b) The legislature of the government of the Virgin Islands may 
provide, in connection with any issue of bonds or other obligations 
authorized to be issued under subsection (a) the proceeds of which 
are to be used for public works or other capital projects, that a guar-
antee of such bonds or obligations by the United States should be 
applied for under section 2 of this Act. 
(c) Except to the extent inconsistent with the provisions of this 
Act, the provisions of section 8(b) (ii) of the Revised Organic Act of 
the Virgin Islands (other than the limitation contained in the proviso 
to the first sentence of subparagraph (A)) shall apply to bonds and 
other obligations authorized to be issued under subsection (a). 
SEC. 2. (a) When authorized under subsection (b) of the first section 
of this Act, the government of the Virgin Islands may apply to the 
Secretary of the Interior (hereinafter referred to as the "Secretary") 
for a guarantee of any issue of bonds or other obligations authorized 
to be issued under subsection (a) of the first section of this Act. Any 
such application shall contain such information as the Secretary may 
prescribe. 
(b) The Secretary is authorized, with the approval of the Secretary 
of the Treasury, to guarantee and to enter into commitments to guar-
antee, upon such terms and conditions as he may prescribe, payment 
of principal and interest on bonds and other obligations issued by 
the government of the Virgin Islands under subsection (a) of the first 
section of this Act. No guarantee or commitment to guarantee shall 
be made unless the Secretary determines— 
(1) that the proceeds of such issue will be used only for public 
works or other capital projects; 
(2) taking into account anticipated expenditures by the govern-
ment of the Virgin Islands while the bonds or other obligations 
forming a part of such issue will be outstanding, all outstanding 
obligations of the government of the Virgin Islands which will 
mature while the bonds or other obligations forming a part of 
such issue will be outstanding, and such other factors as he deems 
Aug. 19, 1976 
[H.R. 13359] 
Virgin Islands. 
Revenue bonds. 
48 u s e 1574a. 
48 u s e 1574. 
Bond guarantee, 
application. 
48 u s e 1574b. 
Principal and 
interest 
payments. 
90 STAT. 1194 
PUBLIC LAW 94-392—AUG. 19, 1976 
26 use 7652. 
Fee collection. 
26 u s e 1 et seq. 
Guarantee 
limitation; 
termination. 
Revolving fund. 
Business-type 
budget, 
transmittal to 
eongress. 
Transfer of funds. 
Issuance of notes 
to the Treasury. 
pertinent, that the revenues expected to be received under section 
28(b) of the Kevised Organic Act of the Virgin Islands will be 
sufficient to pay the principal of, and interest on, the bonds or 
other obligations forming a part of such issue; 
(3) that credit is not otherwise available on reasonable terms 
and conditions and that there is reasonable assurance of repay-
ment, and 
(4) that the maturity of any obligations to be guaranteed does 
not exceed thirty years or 90 per centum of the useful life of the 
physical assets to be financed by the obligation, whichever is less 
as determined by the Secretary. 
(c) The Secretary shall charge and collect fees in amounts sufficient 
in his judgment to cover the costs of administering this section. Fees 
collected under this subsection shall be deposited in the revolving fund 
created under subsection (g). 
(d) Any guarantee made by the Secretary shall be conclusive evi-
dence of the eligibility of the obligation for such guarantee, and the 
validity of any guarantee so made shall be incontestable, except for 
fraud or material misrepresentation, in the hands of the holder of 
the guaranteed obligation. Such guarantee shall constitute a pledge 
of the full faith and credit of the United States for such obligation. 
(e) The interest on any obligation guaranteed under this section 
shall be included in gross income for purposes of chapter 1 of the 
Internal Kevenue Code of 1954. 
(f) The aggregate principal amount of obligations which may be 
guaranteed under this Act shall not exceed $61,000,000, No commit-
ment to guarantee shall be entered into under this Act after October 1, 
1979. 
(g)(1) There is hereby created within the Treasury a separate 
fund (hereinafter referred to as "the fund") which shall be available 
to the Secretary without fiscal year limitation as revolving fund for 
the purpose of this Act. A business-type budget for the fund shall be 
prepared, transmitted to the Congress, considered, and enacted in 
the manner prescribed by law (sections 102, 103, and 104 of the 
Government Corporation Control Act (31 U.S.C. 847-849)) for 
wholly owned Government corporations. 
(2) All expenses, including reimbursements to other government 
accounts, and payments pursuant to operations of the Secretary under 
this Act shall be paid from the fund. If at any time the Secretary 
determines that moneys in the fund exceed the present and any reason-
ably prospective future requirements of the fund, such excess may 
be transferred to the general fund of the Treasury. 
(3) If at any time the moneys available in the fund are insufficient 
to enable the Secretary to discharge his responsibilities under guar-
antees under this Act, he shall issue to the Secretary of the Treasury 
notes or other obligations in such forms and denominations, bearing 
such maturities, and subject to such terms and conditions, as may be 
prescribed by the Secretary of the Treasury. Redemption of such notes 
or obligations shall be made by the Secretary from appropriations 
which are hereby authorized for this purpose. Such notes or other 
obligations shall bear interest at a rate determined by the Secretary 
of the Treasury, which shall not be less than a rate determined by 
taking into consideration the average market yield on outstanding 
marketable obligations of the United States of comparable maturities 
during the month preceding the issuance of the notes or other obli-
gations. The Secretary of the Treasury shall purchase any notes or 
other obligations issued hereunder and for that purpose he is author-
PUBLIC LAW 94-392—AUG. 19, 1976 
90 STAT. 1195 
ized to use as a public debt transaction the proceeds from the sale of 
any securities issued under the Second Liberty Bond Act and the 
purposes for which securities may be issued under that Act are 
extended to include any purchase of such notes or obligations. The 
Secretary of the Treasury may at any time sell any of the notes or 
other obligations acquired by him under this subsection. All redemp-
tions, purchases, and sales by the Secretary of the Treasury of such 
notes or other obligations shall be treated as public debt transactions 
of the United States. 
SEC. 3. Each issue of bonds or other obligations issued under sub-
section (a) of the first section of this Act shall have priority for pay-
ment of principal and interest out of revenues received under section 
28(b) of the Revised Organic Act of the Virgin Islands in the order 
of the date of issue, except that issues guaranteed under section 2 shall 
have priority, according to the date of issue, over issues not so guar-
anteed and the revenues received under section 28(b) of the Revised 
Organic Act of the Virgin Islands shall be pledged for the payment 
of such bonds or other obligations. 
SEC. 4. The Secretary is authorized and directed to make grants to 
the government of the Virgin Islands for operation of such government 
in an amount not to exceed $8,500,000. 
SEC. 5. Chapter 44, section 1, of the Act of July 12, 1921 (42 Stat. 
123; 48 U.S.C. 1397), is hereby amended by striking the period at the 
end thereof and inserting in lieu thereof the following language: 
": Provided further^ That, notwithstanding any other provision of 
law, the Legislature of the Virgin Islands is authorized to levy a surtax 
on all taxpayers in an amount not to exceed 10 per centum of their 
annual income tax obligation to the government of the Virgin 
Islands.". 
SEC. 6. There are hereby authorized to be appropriated such sums 
as may be necessary to carry out the provisions of this Act. 
Approved August 19, 1976. 
31 use 774. 
Payment 
priorities. 
48 
use 
1574c. 
26 
use 
7652. 
Grants. 
48 
use 
1574d. 
Income, ten per 
cent surtax levy. 
Appropriation 
autnorization. 
48 u s e 1574a 
note. 
LEGISLATIVE HISTORY: 
HOUSE REPORT No. 94-1080 (Comm. on Interior and Insular Affairs). 
SENATE REPORT No. 94-1021 (eomm. on Interior and Insular Affairs). 
eONGRESSIONAL REGORD, Vol. 122 (1976): 
May 3, considered and passed House. 
July 26, considered and passed Senate, amended. 
Aug. 10, House concurred in Senate amendments.