A bill that would allow the territory to diversify its financial services sector by attracting new businesses passed through one Senate committee and onto another Wednesday, despite concerns over whether it would actually create jobs for local Virgin Islanders.
Presented during Wednesday’s meeting of the Financial Services, Infrastructure and Consumer Affairs Committee, the bill, in essence, takes advantage of the federal government’s recent push for taxpayers to declare any money they have tucked away in offshore accounts, which has since put institutions in non-U.S. jurisdictions, such as the Cayman Islands and Bahamas, under increased scrutiny.
"Because of the tightening of regulations on many financial institutions doing business outside the U.S., those places might be looking to go somewhere else," bill sponsor Sen. Louis P. Hill said during Wednesday’s meeting. "And as a result of the need for these businesses to find a new home, the Virgin Islands needs to be at the forefront of creating an environment that would facilitate them moving here."
Those institutions would then be able to create a market for asset-backed securities in the territory for which the legal framework currently does not exist, he explained further. And because the territory is an American jurisdiction, the industry could be better regulated by the proper federal authorities, along with a superintendent of alternative markets (SAM) tasked with heading up a new division under the local Lieutenant Governor’s Office.
Theoretically appointed by the lieutenant governor, the superintendent will generally oversee any new alternative market business in the territory.
Testifiers at Wednesday’s hearing said three other states — South Carolina, Vermont and Delaware — are either pushing for or have enacted similar legislation, and if this bill passes, the territory would be pulled into the competitive mix. The ultimate goal is to make the Virgin Islands the "domicile of choice" for these businesses, which would build its reputation as an "innovative financial services center," they said.
The new industry would create "high-skilled paying jobs" in legal, accounting and management firms, testifiers said, prompting some senators to question whether that really covered a broad range of Virgin Islanders.
At the end of the day, senators voted to move the bill on to the Rules and Judiciary Committee in hopes that some of the government officials asked to testify at Wednesday’s hearing would come forward with additional information.
"I believe that any piece of legislature that has merit should be properly vetted," said Sen. Nereida Rivera-O’Reilly. "I don’t want to stand in the way of progress. But I’m not going to continue to support it if some of these questions are not addressed."
Voting in favor of the bill Wednesday were Sens. Neville James, Wayne James, Rivera-O’Reilly, Michael Thurland and Celestino A. White Sr.
Sens. Adlah "Foncie" Donastorg and Terrence "Positive" Nelson were absent.
