B-3634, MAY 26, 1939, 18 COMP. GEN. 884

B-3634: May 26, 1939

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VIRGIN ISLANDS - APPLICABILITY OF UNITED STATES NAVIGATION LAWS AND DISPOSITION OF TONNAGE TAX AND FEES SHIP DUES SUCH AS WERE AUTHORIZED UNDER ORDINANCE OF AUGUST 6. ARE NOT "IMPORT DUTIES AND CUSTOMS. WERE SUPERSEDED BY THE TONNAGE TAX. ENTRANCE AND CLEARANCE FEES WHICH ARE FOR COLLECTION. ARE FOR DEPOSIT INTO THE TREASURY OF THE VIRGIN ISLANDS FOR USE AS PROVIDED IN SECTION 35 OF THE SAID ACT. NAVIGATION LAWS OF THE UNITED STATES WERE MADE APPLICABLE TO THE VIRGIN ISLANDS. VESSELS ENTERING A PORT OF THE UNITED STATES FROM A FOREIGN PORT ARE REQUIRED TO PAY TONNAGE TAXES (SECTION 4219. THE CUSTOMS LAWS NOW OBTAINING IN AND FOR THE VIRGIN ISLANDS ARE FOUND IN WHAT IS KNOWN AS LAW NO. 64.

B-3634, MAY 26, 1939, 18 COMP. GEN. 884

VIRGIN ISLANDS - APPLICABILITY OF UNITED STATES NAVIGATION LAWS AND DISPOSITION OF TONNAGE TAX AND FEES SHIP DUES SUCH AS WERE AUTHORIZED UNDER ORDINANCE OF AUGUST 6, 1914, OR OTHER LOCAL LAWS OF THE VIRGIN ISLANDS, ARE NOT "IMPORT DUTIES AND CUSTOMS," AND THEREFORE NOT CONTINUED IN EFFECT BY SECTION 36 OF THE ACT OF JUNE 22, 1936, 49 STAT. 1816, BUT WERE SUPERSEDED BY THE TONNAGE TAX, ENTRANCE AND CLEARANCE FEES WHICH ARE FOR COLLECTION, UNDER SECTION 4 OF THE SAID ACT, 49 STAT. 1808, AND THE NAVIGATION LAWS OF THE UNITED STATES, FROM VESSELS ENTERING VIRGIN ISLANDS PORTS. TONNAGE TAX, ENTRANCE AND CLEARANCE FEES COLLECTED UNDER SECTION 4 OF THE ACT OF JUNE 22, 1936, 49 STAT. 1808, AND THE NAVIGATION LAWS OF THE UNITED STATES FROM VESSELS ENTERING VIRGIN ISLANDS PORTS, ARE FOR DEPOSIT INTO THE TREASURY OF THE VIRGIN ISLANDS FOR USE AS PROVIDED IN SECTION 35 OF THE SAID ACT, 49 STAT. 1816.

COMPTROLLER GENERAL BROWN TO THE SECRETARY OF COMMERCE, MAY 26, 1939:

THERE HAS BEEN RECEIVED YOUR LETTER OF MAY 9, 1939, AS FOLLOWS:

UNDER THE PROVISIONS OF SECTION 4 OF THE ACT OF JUNE 22, 1936, 49 STAT. 1808, NAVIGATION LAWS OF THE UNITED STATES WERE MADE APPLICABLE TO THE VIRGIN ISLANDS.

SECTION 36 OF THE ACT OF JUNE 22, 1936, STATES THAT UNTIL CONGRESS SHALL OTHERWISE PROVIDE, ALL LAWS CONCERNING IMPORT DUTIES AND CUSTOMS IN THE MUNICIPALITY OF ST. THOMAS AND ST. JOHN NOW IN EFFECT SHALL BE IN FORCE AND EFFECT IN AND FOR THE VIRGIN ISLANDS.

UNDER THE NAVIGATION LAWS OF THE UNITED STATES, VESSELS ENTERING A PORT OF THE UNITED STATES FROM A FOREIGN PORT ARE REQUIRED TO PAY TONNAGE TAXES (SECTION 4219, R.S.); TO PAY LIGHT MONEY (SECTION 4225, R.S. AS AMENDED); AND TO PAY ENTRANCE AND CLEARANCE FEES (SECTION 2654, R.S.).

THE CUSTOMS LAWS NOW OBTAINING IN AND FOR THE VIRGIN ISLANDS ARE FOUND IN WHAT IS KNOWN AS LAW NO. 64, 1914, APPROVED APRIL 1, 1914. THIS LAW WAS SUBSEQUENTLY AMENDED BY A SUPPLEMENTARY ORDINANCE APPROVED AUGUST 6, 1914.

UNDER PART II OF THIS LAW, AS AMENDED BY THE SUBSEQUENT ORDINANCE, IT IS PROVIDED OR ESTABLISHED THAT DUES BE PAID BY SHIPS ENTERING AND CLEARING TO PORTS IN THE VIRGIN ISLANDS.

IT WILL BE SEEN BY THE FOREGOING THAT, SINCE CONGRESS HAS SPECIFICALLY CONTINUED IN FORCE AND EFFECT ALL LAWS CONCERNING IMPORT DUTIES AND CUSTOMS AND HAS ALSO MADE APPLICABLE THE PROVISIONS OF THE NAVIGATION LAWS OF THE UNITED STATES TO THE VIRGIN ISLANDS, A SOMEWHAT ANOMALOUS SITUATION HAS BEEN CREATED. MANIFESTLY, IT WOULD APPEAR THAT TWO SETS OF LAWS COVERING THE SAME SUBJECT OR FIELD CANNOT BE APPLIED OR ENFORCED AT THE SAME TIME, ESPECIALLY WHERE THERE IS CONFLICT BETWEEN THE TWO.

SPECIFICALLY, THE PROVISIONS OF SECTIONS 4219, R.S. AS AMENDED, 4225, R.S. AS AMENDED, AND 2654, R.S. AS AMENDED, OF THE REVISED STATUTES ESTABLISH CERTAIN RATES OF TONNAGE DUTIES, LIGHT-MONEY DUES, AND ENTRANCE AND CLEARANCE FEES.

PART II OF LAW NO. 64, AS AMENDED, ALSO PROVIDES FOR THE PAYMENT OF SHIP DUES WHICH ARE ANALOGOUS TO THE TONNAGE TAXES, LIGHT-MONEY DUES, AND THE ENTRANCE AND CLEARANCE FEES ESTABLISHED BY THE NAVIGATION LAWS.

THEREFORE, IT APPEARS THAT AS A RESULT OF THIS SOMEWHAT ANOMALOUS SITUATION FOUR QUESTIONS ARISE; TO WIT:

1. BY THE APPLICATION OF THE UNITED STATES NAVIGATION LAWS, HAS THE LOCAL ORDINANCE, APPROVED AUGUST 6, 1914, PART II, SECTION 2, KNOWN AS SHIPS- DUES, ALSO SECTION 2-29, INCLUSIVE, BEEN SUPERSEDED THEREBY?

2. IF SHIPS' DUES LAWS REFERRED TO, ORDINANCE OF AUGUST 6, 1914, HAVE BEEN ENTIRELY SUPERSEDED, AND IS NOT CONSIDERED A LOCAL LAW, WOULD IT BE INCUMBENT UPON THE COLLECTOR OF CUSTOMS TO CEASE COLLECTIONS OF SHIPS' DUES, UNDER SAID ORDINANCE, AND IN LIEU THEREOF COLLECT TONNAGE TAX, ENTRANCE AND CLEARANCE FEES UNDER THE UNITED STATES NAVIGATION LAWS?

3. IF THE ANSWER TO QUESTION 2 IS IN THE AFFIRMATIVE, IN WHAT MANNER SHOULD COLLECTIONS OF THE UNITED STATES TONNAGE TAX, ENTRANCE AND CLEARANCE FEES BE DEPOSITED, WHETHER TO THE CREDIT OF THE LOCAL TREASURY, OR TO THE CREDIT OF THE UNITED STATES?

4. IN THE EVENT IT IS HELD THAT THE ORDINANCE OF AUGUST 6, 1914, ABOVE REFERRED TO, HAS NOT BEEN SUPERSEDED BY THE APPLICATION OF THE UNITED STATES NAVIGATION LAWS, WILL IT BE INCUMBENT UPON THE COLLECTOR OF CUSTOMS TO COLLECT NOT ONLY THE SHIPS' DUES CONTEMPLATED OR REQUIRED UNDER SAID ORDINANCE, BUT ALSO IN ADDITION THERETO, THE ENTRANCE AND CLEARANCE FEES, AS WELL AS TONNAGE TAX REQUIRED UNDER THE UNITED STATES NAVIGATION LAWS?

IN CONSIDERING THE FOREGOING QUESTIONS THE ECONOMICAL PHASE THEREOF SHOULD NOT BE SET ASIDE OR IGNORED. GEOGRAPHICALLY THE UNITED STATES AND BRITISH VIRGIN ISLANDS BELONG TO THE SAME GROUP. THE BRITISH-OWNED ISLANDS LIE ONLY A SHORT DISTANCE EAST OF THE UNITED STATES GROUP, IN FACT ONLY ABOUT SIX-TENTHS OF A NAUTICAL MILE SEPARATES THE TWO GROUPS. LYING MORE EASTWARD, THE BRITISH ISLANDS RECEIVE MORE MOISTURE THAN THE ISLANDS TO THE WEST, THEREFORE ARE CAPABLE OF MORE ABUNDANT AGRICULTURAL PRODUCTION. ANTEDATING THE ACQUISITION BY THE UNITED STATES, OF THE TWO GROUPS OF ISLANDS. THE PEOPLE FROM THE BRITISH VIRGIN ISLANDS HAVE ALWAYS BEEN ACCUSTOMED TO COME TO ST. THOMAS AS A READY MARKET FOR THEIR PRODUCE, CONSISTING OF FRESH VEGETABLES, FRUITS, CATTLE, GOATS, PIGS, AS BRITISH VIRGIN ISLANDS, BE REQUIRED TO PAY $1.50 ENTRANCE FEE; $1.50 CLEARANCE FEE, TONNAGE DUTY, AND LIGHT MONEY UNDER THE UNITED STATES NAVIGATION LAWS, PLUS SHIP DUES UNDER THE INSULAR LAWS, IT IS DOUBTFUL THAT THEY COULD CONTINUE TO BRING THE PRODUCE OF THE BRITISH VIRGIN ISLANDS TO THE MARKET OF ST. THOMAS. THE PEOPLE OF ST. THOMAS ARE NOT QUITE READY YET TO MEET A SITUATION OF THIS KIND. IT MAY BE ADDED THAT, IT FREQUENTLY HAPPENS, A CARGO BROUGHT BY A SAILING VESSEL FROM THE BRITISH VIRGIN ISLANDS YIELDS LESS IN PROFIT THAN THE TAXES HEREINBEFORE REFERRED TO WOULD AMOUNT TO IF ALL WERE IMPOSED AND COLLECTED BY THE COLLECTOR OF CUSTOMS.

IT IS REQUESTED THAT THIS MATTER BE GIVEN YOUR CONSIDERATION AND THE DEPARTMENT BE FURNISHED WITH A REPLY TO THE QUESTIONS PROPOUNDED HEREIN, IN ORDER THAT THE COLLECTOR OF CUSTOMS AT ST. THOMAS, VIRGIN ISLANDS MAY BE PROPERLY ADVISED.

THERE IS ATTACHED HERETO FOR YOUR CONSIDERATION A BOOKLET, ENTITLED "LAWS AND ORDINANCES CONCERNING CUSTOMHOUSE AND SHIP DUES IN ST. THOMAS, ETC., " WHEREIN WILL BE FOUND LAW NO. 64.

THE REFERRED TO SECTIONS 4 AND 36 OF THE ACT OF JUNE 22, 1936, 49 STAT. 1808, 1816, FOR THE ESTABLISHMENT OF A CIVIL GOVERNMENT OF THE VIRGIN ISLANDS OF THE UNITED STATES, PROVIDE, IN PERTINENT PART:

SEC. 4. * * * THAT, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED, ALL LAWS OF THE UNITED STATES FOR THE PROTECTION AND IMPROVEMENT OF THE NAVIGABLE WATERS OF THE UNITED STATES AND THE PRESERVATION OF THE INTEREST OF NAVIGATION AND COMMERCE SHALL APPLY TO THE VIRGIN ISLANDS: * * *

SEC. 36. * * * THAT ALL MONEY HEREAFTER DERIVED FROM ANY TAX LEVIED OR ASSESSED FOR A SPECIAL PURPOSE SHALL BE TREATED AS A SPECIAL FUND IN THE TREASURY OF THE VIRGIN ISLANDS AND PAID OUT FOR SUCH PURPOSE ONLY, EXCEPT WHEN OTHERWISE AUTHORIZED BY THE LEGISLATIVE AUTHORITY HAVING JURISDICTION AFTER THE PURPOSE FOR WHICH SUCH FUND WAS CREATED HAS BEEN IMPORT DUTIES AND CUSTOMS IN THE MUNICIPALITY OF SAINT THOMAS AND SAINT JOHN NOW IN EFFECT SHALL BE IN FORCE AND EFFECT IN AND FOR THE VIRGIN ISLANDS: PROVIDED, THAT THE SECRETARY OF THE TREASURY SHALL DESIGNATE THE SEVERAL PORTS AND SUBPORTS OF ENTRY IN THE VIRGIN ISLANDS OF THE UNITED STATES AND SHALL MAKE SUCH RULES AND REGULATIONS AND APPOINT SUCH OFFICERS AND EMPLOYEES AS HE MAY DEEM NECESSARY FOR THE ADMINISTRATION OF THE CUSTOMS LAWS IN THE VIRGIN ISLANDS OF THE UNITED STATES; AND HE SHALL FIX THE COMPENSATION OF ALL SUCH OFFICERS AND EMPLOYEES AND PROVIDE FOR THE PAYMENT OF SUCH COMPENSATION AND OTHER EXPENSES OF THE COLLECTION OF DUTIES, FEES, AND TAXES IMPOSED UNDER THE CUSTOMS LAWS FROM THE RECEIPTS THEREOF. THE EXPORT DUTIES IN EFFECT ON THE DATE OF ENACTMENT OF THIS ACT MAY BE FROM TIME TO TIME REDUCED, REPEALED, OR RESTORED BY ORDINANCE OF THE MUNICIPAL COUNCIL HAVING JURISDICTION: PROVIDED FURTHER, THAT NO NEW EXPORT DUTIES SHALL BE LEVIED IN THE VIRGIN ISLANDS EXCEPT BY THE CONGRESS.

THERE APPEARS NO CONFLICT BETWEEN THE QUOTED TERMS OF SECTIONS 4 AND 36 OF THE ACT OF JUNE 22, 1936. SHIP DUES ARE NOT "IMPORT DUTIES AND CUSTOMS," AND CONSEQUENTLY SUCH SHIP DUES AS WERE AUTHORIZED UNDER THE ORDINANCE OF AUGUST 6, 1914, OR OTHER LOCAL LAWS OF THE VIRGIN ISLANDS, WERE NOT CONTINUED IN EFFECT BY SECTION 36 OF THE ACT OF JUNE 22, 1936. ON THE CONTRARY, SUCH SHIP DUES ARE SUPERSEDED BY THE ABOVE QUOTED TERMS OF SECTION 4 OF THE ACT OF JUNE 22, 1936, BY THE TONNAGE TAX, ENTRANCE AND CLEARANCE FEES UNDER THE NAVIGATION LAWS OF THE UNITED STATES THAT SHOULD BE COLLECTED FROM VESSELS ENTERING THE PORTS OF THE VIRGIN ISLANDS. AS TO THEIR DISPOSITION AFTER COLLECTION, SECTION 35 OF THE ACT JUNE 22, 1936, PROVIDES:

ALL TAXES, DUTIES, FEES, AND PUBLIC REVENUES COLLECTED IN THE MUNICIPALITY OF SAINT CROIX SHALL BE COVERED INTO THE TREASURY OF THE VIRGIN ISLANDS AND HELD IN ACCOUNT FOR SAID MUNICIPALITY AND ALL TAXES, DUTIES, FEES, AND PUBLIC REVENUES COLLECTED IN THE MUNICIPALITY OF SAINT THOMAS AND SAINT JOHN SHALL BE COVERED INTO SAID TREASURY OF THE VIRGIN ISLANDS AND HELD IN ACCOUNT FOR SAID MUNICIPALITY: PROVIDED, THAT THE PROCEEDS OF CUSTOMS DUTIES, LESS THE COST OF COLLECTION, AND THE PROCEEDS OF CUSTOMS DUTIES, LESS THE COST OF COLLECTION, AND THE PROCEEDS OF THE UNITED STATES INCOME TAX, AND THE PROCEEDS OF ANY TAXES LEVIED BY THE CONGRESS ON THE INHABITANTS OF THE VIRGIN ISLANDS, AND ALL QUARANTINE,PASSPORT, IMMIGRATION, AND NATURALIZATION FEES COLLECTED IN THE VIRGIN ISLANDS SHALL BE COVERED INTO THE TREASURY OF THE VIRGIN ISLANDS AND HELD IN ACCOUNT FOR THE RESPECTIVE MUNICIPALITIES, AND SHALL BE EXPENDED FOR THE BENEFIT AND GOVERNMENT OF SAID MUNICIPALITIES IN ACCORDANCE WITH THE ANNUAL MUNICIPAL BUDGETS. THE MUNICIPAL COUNCIL OF SAINT CROIX MAY MAKE APPROPRIATIONS FOR THE PURPOSES OF SAID MUNICIPALITY FROM, AND TO BE PAID OUT OF, THE FUNDS CREDITED TO ITS ACCOUNT IN THE TREASURY OF THE VIRGIN ISLANDS; AND THE MUNICIPAL COUNCIL OF SAINT THOMAS AND SAINT JOHN MAY MAKE APPROPRIATIONS FOR THE PURPOSES OF SAID MUNICIPALITY FROM, AND TO BE PAID OUT OF, THE FUNDS CREDITED TO ITS ACCOUNT IN SAID TREASURY.

ANSWERING GENERALLY THE FOUR QUESTIONS STATED IN THE ABOVE-QUOTED LETTER, YOU ARE ADVISED THAT UNDER SECTION 4 OF THE ACT OF JUNE 22, 1936, THE FEES PRESCRIBED IN THE NAVIGATION LAWS OF THE UNITED STATES ARE THE ONLY FEES AUTHORIZED TO BE COLLECTED ON VESSELS ENTERING THE PORTS OF THE VIRGIN ISLANDS, AND SUCH FEES ARE REQUIRED TO BE PAID INTO THE TREASURY OF THE VIRGIN ISLANDS FOR USE AS PROVIDED IN THE ABOVE-QUOTED SECTION 35 OF SAID ACT OF JUNE 22, 1936.