I 
112TH CONGRESS 
1ST SESSION H. R. 1883 
To amend the Internal Revenue Code of 1986 to regulate the subsidies 
paid to rum producers in Puerto Rico and the Virgin Islands, and 
for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 12, 2011 
Mr. PIERLUISI (for himself, Mr. ISSA, Mr. SERRANO, Ms. ROS-LEHTINEN, Mr. 
GRIMM, Mr. JONES, Mr. BURTON of Indiana, and Mr. YOUNG of Alaska) 
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 regulate 
the subsidies paid to rum producers in Puerto Rico and 
the Virgin Islands, 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 ‘‘Investing in U.S. Ter-
ritories, Not Corporations Act of 2011’’. 
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SEC. 2. LIMITATION ON GOVERNMENT ASSISTANCE TO RUM 
PRODUCERS. 
Subsection (e) of section 7652 of the Internal Rev-
enue Code of 1986 (relating to shipments of rum to the 
United States) is amended by redesignating paragraphs 
(3) and (4) as paragraphs (4) and (5), respectively, and 
by inserting after paragraph (2) the following new para-
graph: 
‘‘(3) LIMITATION ON GOVERNMENT ASSISTANCE 
TO RUM PRODUCERS.— 
‘‘(A) IN GENERAL.—If the amount of di-
rect and indirect government assistance paid or 
incurred by any covered government during any 
calendar year to persons producing rum within 
the jurisdiction of such government exceeds the 
limitation under subparagraph (B), the amount 
which would (but for this paragraph) be covered 
into the treasury of such government under this 
subsection shall be reduced for each of the 2 
succeeding calendar years by the amount of 
such excess. 
‘‘(B) LIMITATION.—The limitation under 
this subparagraph is the amount equal to 15 
percent of the amount which would (but for this 
paragraph) be covered into the treasury of such 
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government under this section for the calendar 
year. 
‘‘(C) SEPARATE
APPLICATION
TO
EACH 
PRODUCER.—The provisions of subparagraphs 
(A) and (B) shall also be applied separately to 
each rum producer, taking into account only the 
assistance paid or incurred by any covered gov-
ernment to such producer and only such pro-
ducer’s production to which subsection (a)(3) or 
(b)(3) applies, whichever is applicable. 
‘‘(D) 
GOVERNMENT
ASSISTANCE.—For 
purposes of this paragraph— 
‘‘(i) DIRECT
GOVERNMENT
ASSIST-
ANCE.—The term ‘direct government as-
sistance’ includes any transfer of funds, 
grant, subsidy (other than any generally 
available tax subsidy), loan, equity invest-
ment, loan guarantee, production or mar-
keting incentive, income or price support, 
provision of goods or services (other than 
generally available infrastructure and pub-
lic services), and such other assistance pro-
vided by a covered government as the Sec-
retary identifies as consistent with the pur-
poses of this paragraph. 
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‘‘(ii) INDIRECT GOVERNMENT ASSIST-
ANCE.—The term ‘indirect government as-
sistance’ includes any amounts expended 
by a covered government— 
‘‘(I) to promote, market, or oth-
erwise support the rum industry with-
in the jurisdiction of such govern-
ment, 
‘‘(II) to pay principal and inter-
est on, and expenses related to, in-
debtedness incurred, the proceeds of 
which are used to provide rum sub-
sidies, or 
‘‘(III) for any other purpose 
identified by the Secretary as con-
sistent with the purposes of this para-
graph. 
‘‘(iii) CERTAIN DEBT-FINANCED PAY-
MENTS
EXCLUDED.—The terms ‘direct 
government assistance’ and ‘indirect gov-
ernment assistance’ shall not include any 
payment made by a covered government to 
a rum producer out of funds raised 
through a loan (including the issuance of a 
debt instrument), but shall include any 
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payment of principal and interest on the 
loan (or debt instrument). 
‘‘(E) ANNUAL
REPORTS.—Each covered 
government shall, for each calendar year, sub-
mit a report to the Secretary detailing the 
amount and type of direct and indirect govern-
ment assistance provided by such government 
to each rum producer during such calendar year 
and to rum producers in the aggregate during 
such year. Such report shall be submitted at 
such time, and in such form, as is prescribed by 
the Secretary. 
‘‘(F) COVERED
GOVERNMENT.—For pur-
poses of this paragraph, the term ‘covered gov-
ernment’ means the government of Puerto Rico 
and the government of the Virgin Islands.’’. 
SEC. 3. MAXIMUM AND MINIMUM ALLOCATIONS OF RUM 
EXCISE TAXES BETWEEN PUERTO RICO AND 
THE VIRGIN ISLANDS. 
Section 7652 of the Internal Revenue Code of 1986 
is amended by inserting after subsection (h) the following 
new subsection: 
‘‘(i) LIMITATIONS ON ALLOCATION OF RUM EXCISE 
TAXES BETWEEN PUERTO RICO AND THE VIRGIN IS-
LANDS.— 
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SEC. 4. DENIAL OF COVER OVER FOR RUM REDISTILLED 
INTO CANE NEUTRAL SPIRITS. 
Section 7652 of the Internal Revenue Code of 1986 
is amended by inserting after subsection (i) the following 
new subsection: 
‘‘(j) DENIAL
OF COVER OVER
FOR RUM REDIS-
TILLED INTO CANE NEUTRAL SPIRITS.—No amount shall 
be covered over under subsection (a) or (b) with respect 
to rum which is redistilled into cane neutral spirits after 
being brought into the United States. The Secretary shall 
prescribe such information reporting as the Secretary de-
termines necessary to carry out the preceding sentence.’’. 
SEC. 5. EFFECTIVE DATE. 
(a) IN GENERAL.—Except as provided in subsection 
(b), the amendments made by this section shall apply to 
calendar years after 2011. 
(b) DENIAL OF COVER OVER FOR RUM REDISTILLED 
INTO CANE NEUTRAL SPIRITS.—The amendment made 
by section 4 shall apply to rum brought into the United 
States after the date of the enactment of this Act. 
Æ 
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