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Charlotte Amalie
Tuesday, May 30, 2023
HomeNewsArchivesHouse To Soon Judge Pros, Cons of V.I. Courts Bill

House To Soon Judge Pros, Cons of V.I. Courts Bill

A bill to transform the District Court of the Virgin Islands into a U.S. District Court like those in every state has raised concerns it would weaken investigation of tax cheats. But the reality may be more complicated.

Delegate Donna Christensen has long supported establishing a judicial district of the Virgin Islands, submitting the bill to several successive congresses, and she re-introduced it earlier this year as House Resolution 1991. Along with creating a U.S. District Court for the District of the Virgin Islands under Article III of the U.S. Constitution, the bill gets rid of parts of the Revised Organic Act of 1954 that give the U.S. Attorney authority to prosecute cases under local law when there is also a federal offense.
It also gives the U.S. District Court exclusive jurisdiction over income tax proceedings that occur under laws applicable to the Virgin Islands, a passage that has raised a few eyebrows, as in the states, federal income tax disputes are heard in U.S. Tax Court.
Asked about the bill’s effects on income tax investigations, Christensen said the bill long predated concerns over the territory’s economic development tax benefit program and was just designed to bring the Virgin Islands in line with the rest of the country.
"It does say ‘exclusive jurisdiction’ for tax matters, but that is not the purpose of the bill," she said Tuesday. "Guam and the U.S. Virgin Islands are the only places under the U.S. flag without an Article III court. … We wanted to bring the territory into parity with the rest of the nation and tax issues had no bearing on it."
Article III of the U.S. Constitution give Congress the power to establish federal courts. Currently, the District Court of the Virgin Islands operates under unique local rules set up by the Organic Act of 1954, while Article III courts – all the other federal district courts – operate under a single, uniform set of rules. Among other distinctions, while the territory’s federal judges are appointed for terms, U.S. District Court judges serve for life.
Asked for comment on the bill, Paul Murphy, the acting U.S. Attorney for the territory said only the U.S. Department of Justice’s Office of Legislative Affairs is allowed to comment on legislation pending before Congress. He said he had received several calls about the bill and was forwarding the questions to that office for a response.
Reached by phone Monday, former U.S. Attorney for the Virgin Islands David Nissman said the law about these sorts of issues is complicated and not well settled by the courts. But he said concerns over giving exclusive power over local income tax issues to the U.S. District Court rather than U.S. Tax Court were probably unfounded. While there may be companies receiving Economic Development Commission tax benefits who expect to take disputes over local mirror income tax to U.S. Tax Court, the Organic Act of 1954 as revised already gives exclusive jurisdiction to the District Court of the Virgin Islands, he said.
"Her law does not change this, but it exposes that issue," Nissman said.
There are other advantages and disadvantages to the bill, Nissman said. Federal judges in regular Article III courts can retire at full pay at 65 but can and often do continue working, effectively for free, he said.
"This means in effect each judicial district gets more judges," he said. "Because once they reach that level of seniority that frees up the next position for a new appointee. So other districts have a way of managing increasing case loads without additional resources. We are hurt in the Virgin Islands because we do not have that resource."
On the other hand, allowing the U.S. Attorney to prosecute violations of local law in federal court has its advantages.
"This is something the local government usually likes because it brings more federal resources to deal with violent and white collar crime," Nissman he said.
While Christensen has submitted the bill before, she said there is reason to be optimistic about its prospects in this Congress.
"I spoke with (House Judiciary Committee) Chairman (John) Conyers (D-Mich.) and I believe there is a good chance of getting a hearing on the bill some time during this Congress," she said. While the bill has waited a long time for a hearing, the overwhelming majority of bills never get a committee hearing at all, and Christensen said she is not aware of any overt opposition to it; she believes it is likely to be approved once a hearing occurs.

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