(Washington, DC, October 25, 2005) — Maintaining that the Virgin Islands has the right to set its own tax policy, Delegate to Congress Donna M. Christensen told the Senate Energy and Natural Resources Committee that S. 1829, which would repeal a 1936 federal law that  could result in significant property tax increases in the territory, should be approved. Virgin Islands Lt. Governor Vargrave Richards and Acting Deputy Assistant Secretary of Interior Nik Pula also testified in favor of the measure. The hearing was chaired by Senator Lisa Murkowski (R-AK) and attended by Senator Daniel Akaka (D-HI).

“The Virgin Islands is the only jurisdiction whose property taxes are based on federal law,” said Delegate Christensen. She added that the measure was needed to allow the local government to “fashion local property taxes according to the circumstances and realities of our community.”  Delegate Christensen explained that a recent court ruling struck down the territorial government’s ability to “protect homeowners from soaring property taxes.”  While she specifically cited St. John property owners as being in jeopardy, Christensen told the panel that the “economic security and social stability” of “the entire Virgin Islands” was also at risk.

The Delegate introduced a companion bill in the House, H.R. 59 on the first day of legislative session on January 4th in response to concerns that a court ruling which found the Virgin Islands in violation of the 1936 law could result in a significant increase in residential property taxes. The law could also be interpreted as prohibiting the Virgin Islands government from offering several exemptions that many middle and low income residents now enjoy. It could also have the unintended consequence of being applied retroactively to 1957.

Lt. Governor Vargrave Richards, whose office has jurisdiction over the Virgin Islands Tax Assessor’s Office said the 1936 law “limits the (V.I. government’s) ability to assess and collect real property taxes.” He testified that the court case revived a “long forgotten statute” and the territorial government’s ability to grant exemptions is now threatened.

Senator Murkowski read remarks of Mr. David Bornn of the Virgin Islands and introduced his statement into the record.  Bornn was a party to the lawsuit which resulted in the revival of the 1936 law.  According to Senator Murkowski, Bornn asked that the legislation be amended to re-establish the territory’s right to grant exemptions but asked that the principle of assessing taxes at real value be maintained.

Delegate Christensen also introduced statements for the record for V.I. Senator At Large Craig Barshinger, former Senator At Large Almando Liburd and St. John businessman Myron Allick, all in support of the legislation.