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I 111TH CONGRESS 1ST SESSION H. R. 2122 To amend the Internal Revenue Code of 1986 to provide a special rule for allocating the cover over of distilled spirits taxes between Puerto Rico and the Virgin Islands. IN THE HOUSE OF REPRESENTATIVES APRIL 27, 2009 Mr. PIERLUISI (for himself, Mr. CROWLEY, Mr. GUTIERREZ, Mr. SERRANO, and Ms. VELA´ZQUEZ) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to provide a special rule for allocating the cover over of distilled spirits taxes between Puerto Rico and the Virgin Islands. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SPECIAL RULE FOR ALLOCATING DISTILLED 3 SPIRITS TAXES BETWEEN PUERTO RICO AND 4 THE VIRGIN ISLANDS. 5 (a) IN GENERAL.—Section 7652 of the Internal Rev- 6 enue Code of 1986 is amended by adding at the end the 7 following new subsection: 8 VerDate Nov 24 2008 06:14 Apr 28, 2009 Jkt 079200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2122.IH H2122 wwoods2 on PRODPC68 with BILLS 2 •HR 2122 IH ‘‘(i) TREATMENT OF CERTAIN SUBSIDIES WITH RE- 1 SPECT TO DISTILLED SPIRITS.— 2 ‘‘(1) IN GENERAL.—If— 3 ‘‘(A) an amount would (but for this para- 4 graph) be covered into the treasury of a speci- 5 fied government with respect to an article con- 6 taining distilled spirits, and 7 ‘‘(B) the Secretary determines that such 8 government provided an unreasonable subsidy 9 with respect to the production of such article, 10 then such amount shall not be covered into the 11 treasury of such government and shall be covered 12 into the treasury of the other specified government. 13 ‘‘(2) UNREASONABLE SUBSIDIES.—For pur- 14 poses of this subsection— 15 ‘‘(A) IN GENERAL.—A subsidy shall be 16 considered unreasonable if the Secretary deter- 17 mines that the subsidy— 18 ‘‘(i) is excessive relative to the amount 19 which would (without regard to this sub- 20 section) be covered into the treasury of the 21 government providing the subsidy with re- 22 spect to the articles to which the subsidy 23 relates, and 24 VerDate Nov 24 2008 06:14 Apr 28, 2009 Jkt 079200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2122.IH H2122 wwoods2 on PRODPC68 with BILLS 3 •HR 2122 IH ‘‘(ii) has the effect of encouraging the 1 transfer of the production of such articles 2 from the jurisdiction of the other specified 3 government. 4 ‘‘(B) PER SE UNREASONABLE SUB- 5 SIDIES.—In no event may the Secretary deter- 6 mine that a subsidy is reasonable with respect 7 to the production of articles if it exceeds an 8 amount equal to 10 percent of the amount 9 which would (without regard to this subsection) 10 be covered into the treasury of the government 11 providing the subsidy with respect to such arti- 12 cles. 13 ‘‘(3) SPECIFIED GOVERNMENT.—For purposes 14 of this paragraph, the term ‘specified government’ 15 means Puerto Rico and the Virgin Islands.’’. 16 (b) EFFECTIVE DATE.—The amendment made by 17 this section shall apply to distilled spirits brought into the 18 United States after the date of the enactment of this Act. 19 Æ VerDate Nov 24 2008 06:14 Apr 28, 2009 Jkt 079200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6301 E:\BILLS\H2122.IH H2122 wwoods2 on PRODPC68 with BILLS