I

108TH CONGRESS

1ST SESSION H. R. 2186

To amend the Internal Revenue Code of 1986 to cover over to a possession

of the United States whose income tax laws mirror such Code as the

refundable portions of the child tax credit and earned income tax credit,

and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MAY 21, 2003

Ms. BORDALLO (for herself and Mrs. CHRISTENSEN) 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 cover over

to a possession of the United States whose income tax

laws mirror such Code as the refundable portions of

the child tax credit and earned income tax credit, and

for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Insular Areas Tax

5 Credit Guarantee Act of 2003’’.
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1 SEC. 2. COVER OVER OF REFUNDABLE PORTIONS OF CHILD

2 TAX CREDIT AND EARNED INCOME TAX

3 CREDIT TO POSSESSIONS WHOSE INCOME

4 TAX LAWS MIRROR THE INTERNAL REVENUE

5 CODE OF 1986.

6 (a) IN GENERAL.—Section 7654 of the Internal Rev7 enue Code of 1986 (relating to coordination of United

8 States and certain possession individual income taxes) is

9 amended by redesignating subsection (e) as subsection (f)

10 and by inserting after subsection (d) the following new

11 subsection:

12 ‘‘(e) REFUNDABLE PORTION OF CERTAIN CRED13 ITS.—

14 ‘‘(1) IN GENERAL.—In addition to the amounts

15 determined under the preceding provisions of this

16 section, the United States shall pay to each mirror

17 system possession (not less often than quarterly) an

18 amount equal to the aggregate refunds paid by such

19 possession to individuals to the extent the amount of

20 each such refund does not exceed the amount the

21 credit determined under sections 24(d) and 32. An

22 estimate of the amounts required to be paid under

23 this subsection during any calendar year shall be

paid during the first 31 24 ⁄2 months of such year. Prop25 er adjustments shall be made in the amounts subse26 quently transferred to the extent prior estimates
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1 were in excess of or less than the amounts required

2 to be transferred.

3 ‘‘(2) MIRROR SYSTEM POSSESSION.—For pur4 poses of this subsection, the term ‘mirror system

5 possession’ means any possession of the United

6 States if the income tax laws of the United States

7 (as in effect at any one time or from time to time)

8 are used to determine income tax liability to such

9 possession as if such possession were the United

10 States.’’

11 (b) EFFECTIVE DATE.—The amendment made by

12 this section shall apply to taxable years beginning after

13 the date of the enactment of this Act.

14 SEC. 3. PAYMENTS OF WITHHOLDING TAXES OF MEMBERS

15 OF ARMED FORCES ON TEMPORARY DUTY IN

16 CERTAIN TERRITORIES.

17 (a) IN GENERAL.—Paragraph (1) of section 7654(d)

18 of the Internal Revenue Code of 1986 (relating to Federal

19 personnel) is amended by inserting ‘‘, or who are on tem20 porary duty, or are otherwise temporarily assigned or de21 ployed, in such possession for more than 30 days during

22 any calendar year,’’ after ‘‘such possession’’.

23 (b) TIMING OF PAYMENTS TO POSSESSIONS.—Sub24 section (d) of section 7654 of such Code is amended by

25 adding at the end the following flush sentences:
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1 ‘‘An estimate of the amounts required to be paid under

2 this subsection during any calendar year shall be paid during the first 31 3 ⁄2 months of such year. Proper adjustments

4 shall be made in the amounts subsequently transferred to

5 the extent prior estimates were in excess of or less than

6 the amounts required to be transferred.’’

7 (c) EFFECTIVE DATES.—

8 (1) SUBSECTION (a).—The amendment made by

9 subsection (a) shall apply to amounts deducted and

10 withheld after the date of the enactment of this Act.

11 (2) SUBSECTION (b).—The amendment made by

12 subsection (b) shall apply to calendar years begin13 ning after the date of the enactment of this Act.

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