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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.