(a) Purpose. The purpose of the Economic Recovery Fee is to encourage and promote the recovery and improvement, and expansion of the Territory’s hotel sector.
(b) Fee. Developers of hotels located or to be located in the U.S. Virgin Islands may apply for authorization to impose and collect an Economic Recovery Fee to finance, fund, or cover the costs incurred for renovation or reconstruction, construction, improvement, and development of hotel properties and related facilities or infrastructure (“ERF Projects”), subject to the provisions of this chapter. The scope of the facilities and infrastructure that may be financed, funded or covered and authorized pursuant to this section, includes the scope of the facilities and infrastructure described in the definition of Project pursuant to section 1303 of this chapter.
(c) Application and approval.(1) A Developer seeking authorization to impose an Economic Recovery Fee which is being used to secure Hotel Development Notes shall submit an application in accordance with the requirements set forth in section 1306 of this chapter and shall be considered for approval in accordance with section 1307 of this chapter.(2) A Developer seeking authorization to impose an Economic Recovery Fee which is not being used to secure Hotel Development Notes shall submit an application in accordance with the requirements set forth in subparagraph (A) of this paragraph and shall be considered for approval or disapproval in accordance with the procedures set forth in subsection (d), paragraphs (1) through (3) of this section.(A) Any application submitted by a Developer seeking to impose an Economic Recovery Fee which is not being used to secure Hotel Development Notes shall include the following:(i) A statement of the intention to obtain authorization to assess an Economic Recovery Fee;(ii) The amount of the proposed fee which shall not be greater than the amount set forth in section 1312(g) of this chapter;(iii) Information identifying the applicant, its ownership and corporate structure, and demonstrating its ownership or possessory interest in a hotel property;(iv) The applicant’s most recent audited financial statements if the applicant is a new applicant or an applicant that is not a beneficiary in good standing with the Economic Development Program, as set out in title 29, chapter 12, subchapter I of the Virgin Islands Code, at the time of its application;(v) A description in reasonable detail of the plans for the proposed ERF Project including, as applicable: the number of rooms to be constructed or renovated; the approximate square footage of the area(s) to be constructed, reconstructed or renovated; the nature, size, and scope of any amenities or infrastructure to be constructed reconstructed, or renovated; the general standard of finish sought to be achieved by the construction, reconstruction, or renovation; and a schedule of the timing and phasing of the ERF Project(s); and(vi) the time frame in which the imposition of the Economic Recovery Fee is sought to be imposed, not to exceed thirty (30) years.
(1) A Developer seeking authorization to impose an Economic Recovery Fee which is being used to secure Hotel Development Notes shall submit an application in accordance with the requirements set forth in section 1306 of this chapter and shall be considered for approval in accordance with section 1307 of this chapter.
(2) A Developer seeking authorization to impose an Economic Recovery Fee which is not being used to secure Hotel Development Notes shall submit an application in accordance with the requirements set forth in subparagraph (A) of this paragraph and shall be considered for approval or disapproval in accordance with the procedures set forth in subsection (d), paragraphs (1) through (3) of this section.(A) Any application submitted by a Developer seeking to impose an Economic Recovery Fee which is not being used to secure Hotel Development Notes shall include the following:(i) A statement of the intention to obtain authorization to assess an Economic Recovery Fee;(ii) The amount of the proposed fee which shall not be greater than the amount set forth in section 1312(g) of this chapter;(iii) Information identifying the applicant, its ownership and corporate structure, and demonstrating its ownership or possessory interest in a hotel property;(iv) The applicant’s most recent audited financial statements if the applicant is a new applicant or an applicant that is not a beneficiary in good standing with the Economic Development Program, as set out in title 29, chapter 12, subchapter I of the Virgin Islands Code, at the time of its application;(v) A description in reasonable detail of the plans for the proposed ERF Project including, as applicable: the number of rooms to be constructed or renovated; the approximate square footage of the area(s) to be constructed, reconstructed or renovated; the nature, size, and scope of any amenities or infrastructure to be constructed reconstructed, or renovated; the general standard of finish sought to be achieved by the construction, reconstruction, or renovation; and a schedule of the timing and phasing of the ERF Project(s); and(vi) the time frame in which the imposition of the Economic Recovery Fee is sought to be imposed, not to exceed thirty (30) years.
(A) Any application submitted by a Developer seeking to impose an Economic Recovery Fee which is not being used to secure Hotel Development Notes shall include the following:(i) A statement of the intention to obtain authorization to assess an Economic Recovery Fee;(ii) The amount of the proposed fee which shall not be greater than the amount set forth in section 1312(g) of this chapter;(iii) Information identifying the applicant, its ownership and corporate structure, and demonstrating its ownership or possessory interest in a hotel property;(iv) The applicant’s most recent audited financial statements if the applicant is a new applicant or an applicant that is not a beneficiary in good standing with the Economic Development Program, as set out in title 29, chapter 12, subchapter I of the Virgin Islands Code, at the time of its application;(v) A description in reasonable detail of the plans for the proposed ERF Project including, as applicable: the number of rooms to be constructed or renovated; the approximate square footage of the area(s) to be constructed, reconstructed or renovated; the nature, size, and scope of any amenities or infrastructure to be constructed reconstructed, or renovated; the general standard of finish sought to be achieved by the construction, reconstruction, or renovation; and a schedule of the timing and phasing of the ERF Project(s); and(vi) the time frame in which the imposition of the Economic Recovery Fee is sought to be imposed, not to exceed thirty (30) years.
(i) A statement of the intention to obtain authorization to assess an Economic Recovery Fee;
(ii) The amount of the proposed fee which shall not be greater than the amount set forth in section 1312(g) of this chapter;
(iii) Information identifying the applicant, its ownership and corporate structure, and demonstrating its ownership or possessory interest in a hotel property;
(iv) The applicant’s most recent audited financial statements if the applicant is a new applicant or an applicant that is not a beneficiary in good standing with the Economic Development Program, as set out in title 29, chapter 12, subchapter I of the Virgin Islands Code, at the time of its application;
(v) A description in reasonable detail of the plans for the proposed ERF Project including, as applicable: the number of rooms to be constructed or renovated; the approximate square footage of the area(s) to be constructed, reconstructed or renovated; the nature, size, and scope of any amenities or infrastructure to be constructed reconstructed, or renovated; the general standard of finish sought to be achieved by the construction, reconstruction, or renovation; and a schedule of the timing and phasing of the ERF Project(s); and
(vi) the time frame in which the imposition of the Economic Recovery Fee is sought to be imposed, not to exceed thirty (30) years.
(d) Economic recovery fee committee and approval process.(1) An Economic Recovery Fee Committee (“ERF Committee”) is hereby established to review any application submitted pursuant to subsection (c)(2) of this section for approval of the Economic Recovery Fee, and to recommend approval or disapproval of the application to the Authority. The ERF Committee shall consist of the Commissioner of the Department of Tourism; the Commissioner of the Department of Finance; and a member of the Authority’s Governing Board or an appropriate designee, which member or designee shall be selected by the Authority’s Governing Board.(2) (A) In reviewing an application, the ERF Committee shall:(i) Determine whether the application contains the information required pursuant to paragraph (2) of subsection (c) of this section;(ii) Consider the creditworthiness, financial history, and financial stability of the applicant; and(iii) Review the application and recommend approval or disapproval of the application to the Authority no later than thirty (30) days after receipt of the application.(B) An applicant who is an EDC Beneficiary in good standing shall be presumed to have sufficient creditworthiness, financial history, and financial stability.(C) If the ERF Committee is unable to reach a consensus on a recommendation, the Committee shall vote, and the majority vote will control.(D) The ERF Committee shall return the application to the Authority along with the ERF Committee’s written recommendation of approval or disapproval.(3) (A) Within 30 days following the Authority’s receipt of the application and the ERF Committee’s recommendation of approval or disapproval pursuant to paragraph (2) of this subsection, the Authority’s Board, by majority vote, with a quorum being present, shall vote to approve or disapprove the application.(B) If the Board fails to vote within the 30-day period set forth in subparagraph (A) of this paragraph, the application shall be deemed approved as of the date the 30-day period expires; except that in a force majeure event that prevents the Board from voting during the 30-day period, the Board shall have up to 60 days to vote to approve or disapprove the application.
(1) An Economic Recovery Fee Committee (“ERF Committee”) is hereby established to review any application submitted pursuant to subsection (c)(2) of this section for approval of the Economic Recovery Fee, and to recommend approval or disapproval of the application to the Authority. The ERF Committee shall consist of the Commissioner of the Department of Tourism; the Commissioner of the Department of Finance; and a member of the Authority’s Governing Board or an appropriate designee, which member or designee shall be selected by the Authority’s Governing Board.
(2) (A) In reviewing an application, the ERF Committee shall:(i) Determine whether the application contains the information required pursuant to paragraph (2) of subsection (c) of this section;(ii) Consider the creditworthiness, financial history, and financial stability of the applicant; and(iii) Review the application and recommend approval or disapproval of the application to the Authority no later than thirty (30) days after receipt of the application.(B) An applicant who is an EDC Beneficiary in good standing shall be presumed to have sufficient creditworthiness, financial history, and financial stability.(C) If the ERF Committee is unable to reach a consensus on a recommendation, the Committee shall vote, and the majority vote will control.(D) The ERF Committee shall return the application to the Authority along with the ERF Committee’s written recommendation of approval or disapproval.
(A) In reviewing an application, the ERF Committee shall:(i) Determine whether the application contains the information required pursuant to paragraph (2) of subsection (c) of this section;(ii) Consider the creditworthiness, financial history, and financial stability of the applicant; and(iii) Review the application and recommend approval or disapproval of the application to the Authority no later than thirty (30) days after receipt of the application.
(i) Determine whether the application contains the information required pursuant to paragraph (2) of subsection (c) of this section;
(ii) Consider the creditworthiness, financial history, and financial stability of the applicant; and
(iii) Review the application and recommend approval or disapproval of the application to the Authority no later than thirty (30) days after receipt of the application.
(B) An applicant who is an EDC Beneficiary in good standing shall be presumed to have sufficient creditworthiness, financial history, and financial stability.
(C) If the ERF Committee is unable to reach a consensus on a recommendation, the Committee shall vote, and the majority vote will control.
(D) The ERF Committee shall return the application to the Authority along with the ERF Committee’s written recommendation of approval or disapproval.
(3) (A) Within 30 days following the Authority’s receipt of the application and the ERF Committee’s recommendation of approval or disapproval pursuant to paragraph (2) of this subsection, the Authority’s Board, by majority vote, with a quorum being present, shall vote to approve or disapprove the application.(B) If the Board fails to vote within the 30-day period set forth in subparagraph (A) of this paragraph, the application shall be deemed approved as of the date the 30-day period expires; except that in a force majeure event that prevents the Board from voting during the 30-day period, the Board shall have up to 60 days to vote to approve or disapprove the application.
(A) Within 30 days following the Authority’s receipt of the application and the ERF Committee’s recommendation of approval or disapproval pursuant to paragraph (2) of this subsection, the Authority’s Board, by majority vote, with a quorum being present, shall vote to approve or disapprove the application.
(B) If the Board fails to vote within the 30-day period set forth in subparagraph (A) of this paragraph, the application shall be deemed approved as of the date the 30-day period expires; except that in a force majeure event that prevents the Board from voting during the 30-day period, the Board shall have up to 60 days to vote to approve or disapprove the application.
(e) Contractual agreement. Upon approval of an application pursuant to subsection (d), paragraph (3) of this section, the applicant shall be deemed to have entered into a contractual agreement with the Authority to impose an Economic Recovery Fee in the amount set forth in its application, and to perform the ERF Project as described in the application which may be modified from time to time pursuant to subsection (f) of this section. The Authority and the applicant shall use their good faith efforts to prepare the terms of a written agreement for execution within a reasonable period of time following the Board’s approval.
(f) Modification. Following approval of an application pursuant to the provisions of section 1312(c)(2) of this chapter, the applicant may modify the Economic Recovery Fee and/or the ERF Project described in the application only as provided in this subsection.(1) To increase or decrease the amount of an Economic Recovery Fee, the applicant shall notify the Authority in writing of the change in the amount of the fee, which change shall be consistent with subsection (g) of this section, and which change shall take effect 30 days following the Authority’s receipt of the notification.(2) To modify an approved ERF Project, the applicant shall submit to the Authority a written request to modify the ERF Project, describing in reasonable detail the nature of the modification and the justification for the modification.(A) Upon receipt of a request to modify the ERF project, the Authority shall forward the modification request to the ERF Committee to determine whether the modification is consistent with the purposes for which the ERF Project was originally approved. The ERF Committee shall recommend approval or disapproval of the modification to the Authority no later than thirty (30) days after receipt of the modification request.(B) Within 30 days of the Authority’s receipt of the ERF Committee’s recommendation pursuant to paragraph (2)(A) of this subsection, the Authority’s Board, by majority vote, with a quorum being present, shall vote to approve or disapprove the modification request.(C) If the Board fails to vote within the 30-day period set forth in subparagraph (B) of this paragraph, the modification request shall be deemed approved. However, in the event of a force majeure occurrence, this thirty (30) day period shall be extended to sixty (60) days.
(1) To increase or decrease the amount of an Economic Recovery Fee, the applicant shall notify the Authority in writing of the change in the amount of the fee, which change shall be consistent with subsection (g) of this section, and which change shall take effect 30 days following the Authority’s receipt of the notification.
(2) To modify an approved ERF Project, the applicant shall submit to the Authority a written request to modify the ERF Project, describing in reasonable detail the nature of the modification and the justification for the modification.(A) Upon receipt of a request to modify the ERF project, the Authority shall forward the modification request to the ERF Committee to determine whether the modification is consistent with the purposes for which the ERF Project was originally approved. The ERF Committee shall recommend approval or disapproval of the modification to the Authority no later than thirty (30) days after receipt of the modification request.(B) Within 30 days of the Authority’s receipt of the ERF Committee’s recommendation pursuant to paragraph (2)(A) of this subsection, the Authority’s Board, by majority vote, with a quorum being present, shall vote to approve or disapprove the modification request.(C) If the Board fails to vote within the 30-day period set forth in subparagraph (B) of this paragraph, the modification request shall be deemed approved. However, in the event of a force majeure occurrence, this thirty (30) day period shall be extended to sixty (60) days.
(A) Upon receipt of a request to modify the ERF project, the Authority shall forward the modification request to the ERF Committee to determine whether the modification is consistent with the purposes for which the ERF Project was originally approved. The ERF Committee shall recommend approval or disapproval of the modification to the Authority no later than thirty (30) days after receipt of the modification request.
(B) Within 30 days of the Authority’s receipt of the ERF Committee’s recommendation pursuant to paragraph (2)(A) of this subsection, the Authority’s Board, by majority vote, with a quorum being present, shall vote to approve or disapprove the modification request.
(C) If the Board fails to vote within the 30-day period set forth in subparagraph (B) of this paragraph, the modification request shall be deemed approved. However, in the event of a force majeure occurrence, this thirty (30) day period shall be extended to sixty (60) days.
(g) Amount of fee. The amount of the Economic Recovery Fee for any ERF Project shall be the difference between (1) a percentage rate of the Designated Hotel Room Occupancy Tax to be selected by the applicant, which rate, notwithstanding provisions 33 V.I.C. § 54(b)(1), may be increased up to 20%, and (2) the percentage rate of Designated Hotel Room Occupancy Tax established by 33 V.I.C. § 54(b)(1) applicable at the time of the application, provided that such difference may never be greater than 7.5%.
(h) Initiation and cancellation of economic recovery fee.(1) Prior to assessing or collecting an approved Economic Recovery Fee the applicant shall notify the Authority of the date on which it intends to begin assessing and collecting the Fee, which date shall not be fewer than 60 days following the notification.(2) (A) If an applicant requests to stop collecting the Economic Recovery Fee, approved pursuant to section 1312(c)(2) of this chapter on a date sooner than what was approved in the application, the applicant must notify the Authority. The applicant’s ability to assess an Economic Recovery Fee will cease 30 days following the notification.(B) An applicant may not request to cease collecting the Economic Recovery Fee approved pursuant to section 1312(c)(1) of this chapter until all Hotel Development Notes secured by the Economic Recovery Fee are paid in full.
(1) Prior to assessing or collecting an approved Economic Recovery Fee the applicant shall notify the Authority of the date on which it intends to begin assessing and collecting the Fee, which date shall not be fewer than 60 days following the notification.
(2) (A) If an applicant requests to stop collecting the Economic Recovery Fee, approved pursuant to section 1312(c)(2) of this chapter on a date sooner than what was approved in the application, the applicant must notify the Authority. The applicant’s ability to assess an Economic Recovery Fee will cease 30 days following the notification.(B) An applicant may not request to cease collecting the Economic Recovery Fee approved pursuant to section 1312(c)(1) of this chapter until all Hotel Development Notes secured by the Economic Recovery Fee are paid in full.
(A) If an applicant requests to stop collecting the Economic Recovery Fee, approved pursuant to section 1312(c)(2) of this chapter on a date sooner than what was approved in the application, the applicant must notify the Authority. The applicant’s ability to assess an Economic Recovery Fee will cease 30 days following the notification.
(B) An applicant may not request to cease collecting the Economic Recovery Fee approved pursuant to section 1312(c)(1) of this chapter until all Hotel Development Notes secured by the Economic Recovery Fee are paid in full.
(i) Notification. Within 30 days of receipt by the Authority of (1) a notification by the applicant pursuant to subsection (h)(1) of this section of its intention to commence assessment of an Economic Recovery Fee, or (2) a notification by the applicant pursuant to subsection (f)(1) of this section of a change in the amount of an Economic Recovery Fee, the Authority shall notify the Virgin Islands Bureau of Internal Revenue of the identity of the applicant, the amount of the Economic Recovery Fee, and the date on which the new or modified Economic Recovery Fee will go into effect.
(j) Collection, calculation and deposit of the economic recovery fee.(1) Each hotel that is the subject of an approved ERF Project shall include on each guest invoice a separate line item for the Economic Recovery Fee.(2) The amount of Economic Recovery Fee charged to any hotel guest shall be calculated in the same manner as the amount of Hotel Room Occupancy Tax charged to a guest pursuant to 33 V.I.C. § 54(b)(1).(3) All Economic Recovery Fee revenues approved pursuant to section 1312(c)(2) of this chapter collected by a hotel shall, upon collection, be separated from Designated Hotel Room Occupancy Tax and the Casino Tax revenues and deposited in the ERF Trust Account established for the Project pursuant to subsection (k) of this section. Economic Recovery Fee revenues, approved pursuant to section 1312(c)(1) of this chapter collected by a hotel shall be applied in accordance with the provisions of section 1308 of this chapter.
(1) Each hotel that is the subject of an approved ERF Project shall include on each guest invoice a separate line item for the Economic Recovery Fee.
(2) The amount of Economic Recovery Fee charged to any hotel guest shall be calculated in the same manner as the amount of Hotel Room Occupancy Tax charged to a guest pursuant to 33 V.I.C. § 54(b)(1).
(3) All Economic Recovery Fee revenues approved pursuant to section 1312(c)(2) of this chapter collected by a hotel shall, upon collection, be separated from Designated Hotel Room Occupancy Tax and the Casino Tax revenues and deposited in the ERF Trust Account established for the Project pursuant to subsection (k) of this section. Economic Recovery Fee revenues, approved pursuant to section 1312(c)(1) of this chapter collected by a hotel shall be applied in accordance with the provisions of section 1308 of this chapter.
(k) Creation of economic recovery fee trust account.(1) Within 30 days of receipt by the Authority of a notification by the applicant pursuant to subsection (h) of this section of the applicant’s intention to commence assessment of an Economic Recovery Fee approved pursuant to section 1312(c)(2) of this chapter, the Authority shall coordinate with the Executive Director of the Virgin Islands Public Finance Authority (“VIPFA”), who shall establish for each approved ERF Project a separate, interest-bearing Economic Recovery Fee Trust Account (“ERF Trust Account”) at a financial institution selected by the VIPFA, for the purpose of receiving, holding, and distributing the revenues generated by the ERF Project’s Economic Recovery Fee and any Designated Hotel Room Occupancy Taxes and any Designated Casino Tax on Gross Revenue directed by the applicant pursuant to section 1313(b) of this chapter. Upon creation of an ERF Trust Account, the VIPFA shall notify the Virgin Islands Bureau of Internal Revenue of the location of the account, the account number, and the identity of the applicant and the ERF Project with which the account is associated. The VIPFA shall maintain the account, and shall not expend, commit to expend or pledge an interest in any of the revenues held in an ERF Project’s Trust Account, other than payment of expenses relating to the administration of that ERF Project’s Trust Account.(2) Monies in an ERF Trust Account, upon request by the applicant, may be withdrawn, pledged, encumbered, or otherwise utilized by the applicant solely for purposes directly related to the associated ERF Project including, but not limited to, direct funding of Project expenses, any reconstruction or renovation related expenses, payment of interest and other expenses associated with any financing of the Project, and reimbursement for expenses previously incurred in executing the Project.(3) If, upon expiration of the Economic Recovery Fee for a particular Project, that Project’s ERF Trust Account contains unused Economic Recovery Fee funds, the funds may be used by the applicant solely for other expenditures for improving or enhancing the completed ERF Project, and any such expenditure must be approved in advance by the Authority using the procedure for modifying ERF Projects set forth in subsection (f) of this section.
(1) Within 30 days of receipt by the Authority of a notification by the applicant pursuant to subsection (h) of this section of the applicant’s intention to commence assessment of an Economic Recovery Fee approved pursuant to section 1312(c)(2) of this chapter, the Authority shall coordinate with the Executive Director of the Virgin Islands Public Finance Authority (“VIPFA”), who shall establish for each approved ERF Project a separate, interest-bearing Economic Recovery Fee Trust Account (“ERF Trust Account”) at a financial institution selected by the VIPFA, for the purpose of receiving, holding, and distributing the revenues generated by the ERF Project’s Economic Recovery Fee and any Designated Hotel Room Occupancy Taxes and any Designated Casino Tax on Gross Revenue directed by the applicant pursuant to section 1313(b) of this chapter. Upon creation of an ERF Trust Account, the VIPFA shall notify the Virgin Islands Bureau of Internal Revenue of the location of the account, the account number, and the identity of the applicant and the ERF Project with which the account is associated. The VIPFA shall maintain the account, and shall not expend, commit to expend or pledge an interest in any of the revenues held in an ERF Project’s Trust Account, other than payment of expenses relating to the administration of that ERF Project’s Trust Account.
(2) Monies in an ERF Trust Account, upon request by the applicant, may be withdrawn, pledged, encumbered, or otherwise utilized by the applicant solely for purposes directly related to the associated ERF Project including, but not limited to, direct funding of Project expenses, any reconstruction or renovation related expenses, payment of interest and other expenses associated with any financing of the Project, and reimbursement for expenses previously incurred in executing the Project.
(3) If, upon expiration of the Economic Recovery Fee for a particular Project, that Project’s ERF Trust Account contains unused Economic Recovery Fee funds, the funds may be used by the applicant solely for other expenditures for improving or enhancing the completed ERF Project, and any such expenditure must be approved in advance by the Authority using the procedure for modifying ERF Projects set forth in subsection (f) of this section.
(l) Reporting. On or before March 31 of each year while an Economic Recovery Fee is in effect, each applicant that is a beneficiary of an Economic Recovery Fee shall deliver a report to the Authority describing, in reasonable detail, for the prior calendar year the following information:(1) The progress made on any ERF Project or whether the ERF Project has been completed;(2) Any material modifications to any ERF Projects or the amount of the Economic Recovery Fee;(3) The amount of Economic Recovery Fees charged and collected; and(4) The amount of Economic Recovery Fees used to cover costs incurred for the ERF Projects.
(1) The progress made on any ERF Project or whether the ERF Project has been completed;
(2) Any material modifications to any ERF Projects or the amount of the Economic Recovery Fee;
(3) The amount of Economic Recovery Fees charged and collected; and
(4) The amount of Economic Recovery Fees used to cover costs incurred for the ERF Projects.
(m) Violations. An applicant who is determined by the Authority to be in material violation of its Agreement or of the requirements of this section may be subject to a fine not to exceed $30,000 for each violation, or imprisonment for a period not to exceed 90 days, or both a fine and imprisonment.
(n) Sunset. The Economic Recovery Fee shall be available to new applicants whose applications are received prior to December 31, 2028.