Open forum: GRUFF Supports Return of Gasoline Excise Taxes

Limetree Oil Refinery (File photo)
Limetree Oil Refinery (File photo)

Dear Source:

Government Retirees United for Fairness (GRUFF) supports Bill No. 33-0052, a resolution to petition the governor and our delegate, along with residents of the territory, to pursue a return of the gasoline excise tax collected from the federal government for the territory’s oil production. The bill anticipates gasoline refining activity at Limetree Bay refinery on St. Croix, which is expected to range from 45,000 to 53,000 barrels per day, which would generate estimated federal excise tax revenue of between $370,575 to $436,455 per day.

As the senate moves forward with this resolution with the full support of GRUFF, it should be noted that historically the courts have never addressed the actual status of the Virgin Islands as compared to Puerto Rico. While we urge Congress to make the change prospectively, it should include a retrospective look at the provision in the Revised Organic Act and its intent, the courts’ error in lumping Puerto Rico and the Virgin Islands together and the treaty with Denmark in 1917 that should have governed the territory’s future. The US Congress needs to recognize the important distinction of how Puerto Rico was acquired and the arm’s length transaction that acquired the Virgin Islands. The language In the Revised Organic Act was designed to offer economic opportunities for the Virgin Islands because we have no natural resources or means of generating income from our natural resources.

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The fact that a Circuit Court misread the language and ruled against the Virgin Islands has haunted the territory for decades. Congress could and should correct the misgivings of the Circuit Court. Applied retroactively, The Virgin Islands would be entitled to a large lump sum of money to correct the GERS deficit and a crumbling health and education infrastructure. Please note the following:

1. Puerto Rico was annexed after the Spanish-American war. However, the Virgin Islands were transferred via a purchase from Denmark. The inclusion of all territories in the insular cases was a great disservice to the people of the territory and the treaty/convention that dictated the sale. Congress understood this great disservice by the Circuit Courts and Supreme Court and attempted to rectify this problem by enacting the Revised Organic Act. The Revised Organic Act includes a provision that gives the territory the opportunity to generate income from anything manufactured here and exported to the United States of America. That language is not ambiguous. The US Congress can rectify these judicial missteps.

2. ARTICLE 6 of the 1916/1917 Treaty/Convention transferring the Virgin Islands from Denmark to the United States is extremely significant in any discussion with Congress regarding the gasoline excise tax. Any resolutions, supporting documents, discussions with Congressmen, or case law analysis, should begin with the crucial distinction between the annexation of Puerto Rico after the war, and the Treaty/Convention with Denmark. The Virgin Islands were
transferred by written agreement. The Treaty/Convention provides complete authority to Congress regarding the territory, except for specific provisions that are not applicable here. Unfortunately, all federal circuit cases addressing the relationship of the territory to the United States have lumped the Virgin Islands into the historically undetermined status of Puerto Rico to the detriment of the Inhabitants of the Virgin Islands. If the discussion with Congress begins with an accurate recognition of the historical development of the territory, Congress could make significant changes in the territory as was intended by the treaty.

3. The relevant Treaty/Convention language in ARTICLE 6 states: If the present laws are altered, the said inhabitants shall not thereby be placed in a less favorable position in respect to the above-mentioned rights and liberties than they now enjoy; The civil rights and political status of the inhabitants of the islands shall be determined by the Congress, subject to the stipulations above.

4. The territory could benefit from a retroactive application of the provision of the Revised Organic Act granting the gasoline excise tax. Prospectively, if revived that money could be used to aid the operation of the government. If applied retroactively, it can completely fix GERS and provide much needed revenue for hospitals and schools in the territory.
5. GRUFF asks that the legislature consider revising its resolution, to include:
Any gasoline excise tax collected for Limetree production must have a portion dedicated to pay GERS.

Also, GRUFF asks the legislature to include retroactive application of the gasoline excise tax attributable to HESS/HOVENSA production1; If Congress addresses retroactive application, GRUFF asks that that money be dedicated to fix GERS and to build state of the art hospitals and schools on all three islands.

Very truly yours,
Helen Hart, chairperson and Barbara Isaac, member

(sent to all senators, Gov. Albert Bryan Jr., Lt. Gov. Tregenza A. Roach Esq. and Delegate to Congress Stacey Plaskett)

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