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106TH CONGRESS

1ST SESSION H. R. 2139

To amend the Internal Revenue Code of 1986 to repeal the limitation of

the cover over of tax on distilled spirits, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JUNE 10, 1999

Mr. CRANE (for himself, Mr. RANGEL, Mr. ROMERO-BARCELO ́, Mrs.

CHRISTENSEN, Mr. HAYWORTH, Mr. ENGLISH, Mr. FOLEY, and Mr.

WELLER) 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 repeal

the limitation of the cover over of tax on distilled spirits,

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. REPEAL OF LIMITATION OF COVER OVER OF

4 TAX ON DISTILLED SPIRITS.

5 (a) IN GENERAL.—Section 7652 of the Internal Rev6 enue Code of 1986 (relating to limitation on cover over

7 of tax on distilled spirits) is amended by striking sub-
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1 section (f) and by redesignating subsection (g) as sub2 section (f).

3 (b) CONFORMING AMENDMENTS.—Section 7652(f) of

4 such Code (as so redesignated) is amended by striking

5 ‘‘subsection (f) of this section’’ in paragraph (1)(B) and

6 inserting ‘‘section 5001(a)(1)’’.

7 (c) EFFECTIVE DATE.—

8 (1) IN GENERAL.—The amendments made by

9 this section shall apply to articles containing distilled

10 spirits that are tax-determined after September 30,

11 1999.

12 (2) SPECIAL RULE.—

13 (A) IN GENERAL.—For the 5-year period

14 beginning after September 30, 1999, the treas15 ury of Puerto Rico shall make a Conservation

16 Trust Fund transfer within 30 days from the

17 date of each cover over payment made during

18 such period to such treasury under section

19 7652(e) of the Internal Revenue Code of 1986.

20 (B) CONSERVATION TRUST FUND TRANS21 FER.—

22 (i) IN GENERAL.—For purposes of

23 this paragraph, the term ‘‘Conservation

24 Trust Fund transfer’’ means a transfer to

25 the Puerto Rico Conservation Trust Fund
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1 of an amount equal to 50 cents per proof

2 gallon of the taxes imposed under section

3 5001 or section 7652 of such Code on dis4 tilled spirits that are covered over to the

5 treasury of Puerto Rico under section

6 7652(e) of such Code.

7 (ii) TREATMENT OF TRANSFER.—

8 Each Conservation Trust Fund transfer

9 shall be treated as principal for an endow10 ment, the income from which to be avail11 able for use by the Puerto Rico Conserva12 tion Trust Fund for the purposes for

13 which the Trust Fund was established.

14 (iii) RESULT OF NONTRANSFER.—

15 (I) IN GENERAL.—Upon notifica16 tion by the Secretary of the Interior

17 that a Conservation Trust Fund

18 transfer has not been made by the

19 treasury of Puerto Rico during the pe20 riod described in subparagraph (A),

21 the Secretary of the Treasury shall,

22 except as provided in subclause (II),

23 deduct and withhold from the next

24 cover over payment to be made to the

25 treasury of Puerto Rico under section
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1 7652(e) of such Code an amount

2 equal to the appropriate Conservation

3 Trust Fund transfer and interest

4 thereon at the underpayment rate es5 tablished under section 6621 of such

6 Code as of the due date of such trans7 fer. The Secretary of the Treasury

8 shall transfer such amount deducted

9 and withheld, and the interest there10 on, directly to the Puerto Rico Con11 servation Trust Fund.

12 (II) GOOD CAUSE EXCEPTION.—

13 If the Secretary of the Interior finds,

14 after consultation with the Governor

15 of Puerto Rico, that the failure by the

16 treasury of Puerto Rico to make a re17 quired transfer was for good cause,

18 and notifies the Secretary of the

19 Treasury of the finding of such good

20 cause before the due date of the next

21 cover over payment following the noti22 fication of nontransfer, then the Sec23 retary of the Treasury shall not de24 duct the amount of such nontransfer

25 from any cover over payment.
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1 (C) PUERTO RICO CONSERVATION TRUST

2 FUND.—For purposes of this paragraph, the

3 term ‘‘Puerto Rico Conservation Trust Fund’’

4 means the fund established pursuant to a

5 Memorandum of Understanding between the

6 United States Department of the Interior and

7 the Commonwealth of Puerto Rico, dated De8 cember 24, 1968.

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