Nov. 28, 2006 — In a surprise move after a full day of discussion and debate, senators held up all bills under consideration but one Tuesday, approving only an agreement for marketing rum.
The approved bill was a five-year marketing support agreement between the government and V.I. Rum Industries. Otherwise senators voted unanimously to hold in committee a majority of the bills up for consideration at Tuesday's special legislative session.
The rum bill is designed as a win-win arrangement between the government and rum makers. Under the agreement, which runs until 2011, the government will pay V.I. Rum Industries 35 percent of the extra excise tax revenues it receives as a result of increased marketing efforts. In exchange, the company will make an initial investment of $61 million to promote Cruzan and Conch Republic brand rums. (See "Rum Makers Tout Government Marketing Deal.")
During the meeting, representatives from the government's financial team said it was "urgent" that senators approve the agreement, since the territory's rum revenues support $400 million worth of bonds issued by the government. According to Office of Management and Budget Director Ira Mills, rum revenues also finance "other infrastructural improvements," and help to contribute to the General Fund.
The remaining bills will remain in the Committee of the Whole "until further notice" — including a bill to determine whether purchasing the V.I. Telephone Co. (Vitelco) and other Innovative Communication Corp. companies would be "in the best interest" of the territory.
While no one called the Vitelco bill up for a vote Tuesday, senators spent much time during the meeting voicing their opinions on the matter. At the end of the day, however, they came to a general consensus: Use money "sitting in the coffers of the Public Finance Authority" to hire personnel who can determine whether purchasing the phone company and other ICC entities would be a "worthwhile pursuit" for the government.
"The whole reason that this bill was sent to us is because the governor is trying to find a way to start the discussion in the Legislature, and have us sanction the bill so that it looks like we're supporting the study," said Sen. Usie R. Richards after the meeting. "That's not going to happen."
Also held in committee was a bill calling for the issuance of up to $185 million in bonds to refinance a portion of bonds floated by the PFA in 1999 and 2003. Members of the government's financial team, along with the PFA's financial advisors and bond counsel, said they recommended issuing the bonds "as soon as possible" to take advantage of current low interest rates. But senators said the proposal "could wait until January."
If approved, the proposal would make approximately $72.5 million worth of bonds eligible for refinancing, yielding approximately $6.5 million in savings for the government.
Senators waited an extra hour before calling Tuesday's session to order, holding out for an additional bill sent down by Gov. Charles W. Turnbull around 10:30 a.m. The bill would give Golden Resorts LLP a guarantee on a $15 million "interim loan," which would be used to start construction of a proposed hotel and resort on St. Croix. The senators also held that bill.
"That means they'll be considered in the 27th Legislature," Sen. Louis P. Hill joked after the session.
As the evening wore on, Senate President Lorraine L. Berry mentioned that residents calling into local radio programs early Friday morning suggested that senators postpone voting on the measures. Around 7 p.m., Hill made the motion to hold the bills.
Turnbull submitted the bills to the Legislature late Friday evening, along with a letter to Berry calling a special session for Tuesday. (See "Outgoing Governor Submits Bills on Vitelco, Bond Bailout and Rum.")
"Those bills are just absolutely and ridiculously inappropriate for the Legislature to consider at this point in time," Hill said after the meeting. "They have too many far-reaching consequences to be considered during a lame-duck administration by a lame-duck Senate."
Voting in favor of Hill's motion to hold the bills was Berry, along with Sens. Liston Davis, Pedro "Pete" Encarnacion, Juan Figueroa-Serville, Hill, Norman Jn Baptiste, Terrence "Positive" Nelson, Richards, Ronald E. Russell and Celestino A. White Sr.
Absent when the vote was taken were Sens. Craig W. Barshinger, Roosevelt C. David, Adlah "Foncie" Donastorg, Neville James and Shawn-Michael Malone.
All senators were present during Tuesday's session.
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