§1403 Issuance of bonds or other obligations by government or municipalities; use of proceeds; limit on public indebtedness; terms, execution, interest rate, and sale price; taxes

Summary

The government of the Virgin Islands and its towns may sell negotiable bonds and other debt to pay for public works. That covers things like streets, bridges, harbors, sewers, municipal buildings, schools, libraries, gyms and fields, fire stations, electric systems and other utilities (including those run by the Saint Thomas Power Authority), plus slum clearance, urban redevelopment, and low-rent housing. No town may borrow more than 10% of the total assessed value of its taxable real estate, and the Virgin Islands government may not borrow more than 10% of the total assessed value of taxable real estate in the islands. The bonds can be dated, sized, and sold in ways the issuing government decides. They can mature up to 30 years, be sold publicly or privately, be callable (paid off early) or not, and have different registration options. Signatures on bonds stay valid even if an officer leaves before delivery. Interest may not exceed 4% per year and is paid twice a year. Bonds must sell for at least their principal plus accrued interest. The bonds and their interest are exempt from federal, territorial, state, local, and District of Columbia taxes. The Virgin Islands and its towns must levy and collect enough taxes to pay bond debt, even if that requires a tax rate higher than 1.25% of assessed value.