I 

114TH CONGRESS 

2D SESSION H. R. 5163 

To amend the Internal Revenue Code of 1986 to provide for economic recovery 

in the Virgin Islands and Guam, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 29, 2016 

Ms. PLASKETT (for herself and Ms. BORDALLO) 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 

for economic recovery in the Virgin Islands and Guam, 

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 ‘‘Territorial Economic 

5 Growth and Recovery Act of 2016’’. 

6 SEC. 2. REPEAL OF LIMITATION ON COVER OVER OF DIS7 TILLED SPIRITS TAXES. 

8 (a) IN GENERAL.—Section 7652(f) of the Internal 

9 Revenue Code of 1986 is repealed. 


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

2 this section shall apply to distilled spirits brought into the 

3 United States after December 31, 2015. 

4 SEC. 3. PAYMENTS TO UNITED STATES TERRITORIES AND 

5 POSSESSIONS. 

6 (a) EARNED INCOME CREDIT.—Section 32 of the In7 ternal Revenue Code of 1986 is amended by adding at the 

8 end the following: 

9 ‘‘(n) TREATMENT OF POSSESSIONS.— 

10 ‘‘(1) PAYMENTS TO POSSESSIONS.— 

11 ‘‘(A) MIRROR CODE POSSESSION.—The 

12 Secretary of the Treasury shall periodically (but 

13 not less frequently than annually) pay to each 

14 possession of the United States with a mirror 

15 code tax system amounts equal to the loss to 

16 that possession by reason of the application of 

17 this section (determined without regard to para18 graph (2)) with respect to taxable years begin19 ning after December 31, 2015. Such amounts 

20 shall be determined by the Secretary of the 

21 Treasury based on information provided by the 

22 government of the respective possession. 

23 ‘‘(B) OTHER POSSESSIONS.—The Sec24 retary of the Treasury shall periodically (but no 

25 less frequently than annually) pay to each posVerDate Sep 11 2014 01:21 May 06, 2016 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5163.IH H5163

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1 session of the United States which does not 

2 have a mirror code tax system amounts esti3 mated by the Secretary of the Treasury as 

4 being equal to the aggregate benefits that would 

5 have been provided to residents of such posses6 sion by reason of the application of this section 

7 for taxable years beginning after December 31, 

8 2015, if a mirror code tax system had been in 

9 effect in such possession. The preceding sen10 tence shall not apply with respect to any posses11 sion of the United States unless such possession 

12 has a plan, which has been approved by the 

13 Secretary of the Treasury, under which such 

14 possession will promptly distribute such pay15 ments to the residents of such possession. 

16 ‘‘(2) COORDINATION WITH CREDIT ALLOWED

17 AGAINST UNITED STATES INCOME TAXES.—No cred18 it shall be allowed under this section for any taxable 

19 year to any person— 

20 ‘‘(A) to whom a credit is allowed against 

21 taxes imposed by the possession by reason of 

22 this section (determined without regard to this 

23 paragraph) for such taxable year, or 


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1 ‘‘(B) who is eligible for a payment under 

2 a plan described in paragraph (1)(B) with re3 spect to such taxable year. 

4 ‘‘(3) DEFINITIONS AND SPECIAL RULES.— 

5 ‘‘(A) POSSESSION OF THE UNITED

6 STATES.—For purposes of this subsection, the 

7 term ‘possession of the United States’ includes 

8 the Commonwealth of Puerto Rico and the 

9 Commonwealth of the Northern Mariana Is10 lands. 

11 ‘‘(B) MIRROR CODE TAX SYSTEM.—For 

12 purposes of this subsection, the term ‘mirror 

13 code tax system’ means, with respect to any 

14 possession of the United States, the income tax 

15 system of such possession if the income tax li16 ability of the residents of such possession under 

17 such system is determined by reference to the 

18 income tax laws of the United States as if such 

19 possession were the United States, and such 

20 system includes a tax credit substantially iden21 tical to the credit allowed under this section. 

22 ‘‘(C) TREATMENT OF PAYMENTS.—For 

23 purposes of section 1324(b)(2) of title 31, 

24 United States Code, or any similar rule of law, 

25 any payment made under this subsection shall 


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1 be treated in the same manner as a refund due 

2 from the credit allowed under this section.’’. 

3 (b) CHILD TAX CREDIT.—Section 24 of such Code 

4 is amended by adding at the end the following: 

5 ‘‘(h) PAYMENTS TO VIRGIN ISLANDS AND GUAM FOR

6 LOST REVENUE.—The Secretary shall make annual pay7 ments to the Virgin Islands and to Guam in amounts 

8 equal to the aggregate loss to the Virgin Islands or Guam, 

9 as the case may be, by reason of the application of this 

10 section with respect to taxable years beginning after 2015. 

11 Such amounts shall be determined by the Secretary based 

12 on information provided by the Virgin Islands and Guam. 

13 For purposes of section 1324(b)(2) of title 31, United 

14 States Code, the payments under this subsection shall be 

15 treated in the same manner as a refund due from the cred16 it allowed under this section.’’. 

17 (c) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply with respect to taxable years begin19 ning after December 31, 2015. 

20 SEC. 4. STUDY AND REPORT REGARDING VIRGIN ISLANDS 

21 PUBLIC PENSION PLANS. 

22 Not later than 6 months after the date of the enact23 ment of this Act, the Joint Board for the Enrollment of 

24 Actuaries established under section 3041 of the Employee 

25 Retirement Income Security Act of 1974 (29 U.S.C. 1241) 


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1 shall report to the Office of Domestic Finance of the De2 partment of the Treasury on recommendations on actions 

3 that would be necessary to ensure that the public pension 

4 plans of the Virgin Islands can be sustainably maintained 

5 and funded by the government of the Virgin Islands for 

6 the next 20 years. 

Æ 


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