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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Territorial Economic 
Growth and Recovery Act of 2016’’. 
SEC. 2. REPEAL OF LIMITATION ON COVER OVER OF DIS-
TILLED SPIRITS TAXES. 
(a) IN GENERAL.—Section 7652(f) of the Internal 
Revenue Code of 1986 is repealed. 
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(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to distilled spirits brought into the 
United States after December 31, 2015. 
SEC. 3. PAYMENTS TO UNITED STATES TERRITORIES AND 
POSSESSIONS. 
(a) EARNED INCOME CREDIT.—Section 32 of the In-
ternal Revenue Code of 1986 is amended by adding at the 
end the following: 
‘‘(n) TREATMENT OF POSSESSIONS.— 
‘‘(1) PAYMENTS TO POSSESSIONS.— 
‘‘(A) MIRROR
CODE
POSSESSION.—The 
Secretary of the Treasury shall periodically (but 
not less frequently than annually) pay to each 
possession of the United States with a mirror 
code tax system amounts equal to the loss to 
that possession by reason of the application of 
this section (determined without regard to para-
graph (2)) with respect to taxable years begin-
ning after December 31, 2015. Such amounts 
shall be determined by the Secretary of the 
Treasury based on information provided by the 
government of the respective possession. 
‘‘(B) OTHER
POSSESSIONS.—The Sec-
retary of the Treasury shall periodically (but no 
less frequently than annually) pay to each pos-
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session of the United States which does not 
have a mirror code tax system amounts esti-
mated by the Secretary of the Treasury as 
being equal to the aggregate benefits that would 
have been provided to residents of such posses-
sion by reason of the application of this section 
for taxable years beginning after December 31, 
2015, if a mirror code tax system had been in 
effect in such possession. The preceding sen-
tence shall not apply with respect to any posses-
sion of the United States unless such possession 
has a plan, which has been approved by the 
Secretary of the Treasury, under which such 
possession will promptly distribute such pay-
ments to the residents of such possession. 
‘‘(2) COORDINATION
WITH
CREDIT
ALLOWED 
AGAINST UNITED STATES INCOME TAXES.—No cred-
it shall be allowed under this section for any taxable 
year to any person— 
‘‘(A) to whom a credit is allowed against 
taxes imposed by the possession by reason of 
this section (determined without regard to this 
paragraph) for such taxable year, or 
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‘‘(B) who is eligible for a payment under 
a plan described in paragraph (1)(B) with re-
spect to such taxable year. 
‘‘(3) DEFINITIONS AND SPECIAL RULES.— 
‘‘(A) 
POSSESSION
OF
THE
UNITED 
STATES.—For purposes of this subsection, the 
term ‘possession of the United States’ includes 
the Commonwealth of Puerto Rico and the 
Commonwealth of the Northern Mariana Is-
lands. 
‘‘(B) MIRROR
CODE
TAX
SYSTEM.—For 
purposes of this subsection, the term ‘mirror 
code tax system’ means, with respect to any 
possession of the United States, the income tax 
system of such possession if the income tax li-
ability of the residents of such possession under 
such system is determined by reference to the 
income tax laws of the United States as if such 
possession were the United States, and such 
system includes a tax credit substantially iden-
tical to the credit allowed under this section. 
‘‘(C) TREATMENT
OF
PAYMENTS.—For 
purposes of section 1324(b)(2) of title 31, 
United States Code, or any similar rule of law, 
any payment made under this subsection shall 
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be treated in the same manner as a refund due 
from the credit allowed under this section.’’. 
(b) CHILD TAX CREDIT.—Section 24 of such Code 
is amended by adding at the end the following: 
‘‘(h) PAYMENTS TO VIRGIN ISLANDS AND GUAM FOR 
LOST REVENUE.—The Secretary shall make annual pay-
ments to the Virgin Islands and to Guam in amounts 
equal to the aggregate loss to the Virgin Islands or Guam, 
as the case may be, by reason of the application of this 
section with respect to taxable years beginning after 2015. 
Such amounts shall be determined by the Secretary based 
on information provided by the Virgin Islands and Guam. 
For purposes of section 1324(b)(2) of title 31, United 
States Code, the payments under this subsection shall be 
treated in the same manner as a refund due from the cred-
it allowed under this section.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to taxable years begin-
ning after December 31, 2015. 
SEC. 4. STUDY AND REPORT REGARDING VIRGIN ISLANDS 
PUBLIC PENSION PLANS. 
Not later than 6 months after the date of the enact-
ment of this Act, the Joint Board for the Enrollment of 
Actuaries established under section 3041 of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1241) 
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shall report to the Office of Domestic Finance of the De-
partment of the Treasury on recommendations on actions 
that would be necessary to ensure that the public pension 
plans of the Virgin Islands can be sustainably maintained 
and funded by the government of the Virgin Islands for 
the next 20 years. 
Æ 
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