HR 3367 IH
SEC. 2. TAX-FREE DISTRIBUTIONS FROM CERTAIN RETIRE-
MENT PLAN ASSETS INVESTED UNDER A VIR-
GIN ISLANDS INVESTMENT PROGRAM. 
(a) IN GENERAL.—Part I of subchapter D of chapter 
1 of the Internal Revenue Code of 1986 (relating to pen-
sion, profit-sharing, stock bonus plans, etc.) is amended 
by adding at the end the following new section: 
‘‘SEC. 409B. TREATMENT OF DISTRIBUTIONS FROM CER-
TAIN RETIREMENT PLAN ASSETS INVESTED 
UNDER A VIRGIN ISLANDS INVESTMENT PRO-
GRAM. 
‘‘(a) IN GENERAL.—If an individual makes a one- 
time designation of an amount of qualified retirement sav-
ings as being under investment by the Virgin Islands In-
vestment Program for at least 30 years, then, as of the 
close of the 10th year, such amount (and any earnings 
properly allocable to such amount) shall be treated for 
purposes of this title— 
‘‘(1) as a designated Roth account in the case 
of qualified retirement savings described in sub-
section (b)(1), or 
‘‘(2) as a Roth IRA in the case of qualified re-
tirement savings described in subsection (b)(2). No 
amount shall be includible in gross income by reason 
of the change in treatment under the preceding sen-
tence. 
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‘‘(b) QUALIFIED RETIREMENT SAVINGS.—For pur-
poses of this section, the term ‘qualified retirement sav-
ings’ means— 
‘‘(1) amounts attributable to elective deferrals 
under an applicable retirement plan, and 
‘‘(2) amounts held in an individual retirement 
plan which is not a Roth IRA. 
‘‘(c) VIRGIN ISLANDS INVESTMENT PROGRAM.—For 
purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘Virgin Islands 
Investment Program’ means a program of the Virgin 
Islands which meets the requirements of paragraphs 
(2), (3), (4), and (5). 
‘‘(2) MAXIMUM AMOUNT ACCEPTED FOR MAN-
AGEMENT.—A program meets the requirements of 
this paragraph if the amount accepted for manage-
ment 
under 
the 
program 
does 
not 
exceed 
$50,000,000,000. 
‘‘(3) FEES AND TAXES.—A program meets the 
requirements of this paragraph if— 
‘‘(A) the fees charged by investment man-
agers under the program do not exceed the fees 
customarily imposed by investment managers 
for managing like qualified retirement savings 
outside the Virgin Islands Investment Program, 
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‘‘(B) the program imposes an annual tax 
(in addition to the fees permitted under sub-
paragraph (A)) equal to 1 percent of the 
amount designated for management under the 
program for the life of the account without re-
gard to account balance, and 
‘‘(C) the 1 percent tax is imposed notwith-
standing the Roth designation. 
‘‘(4) 
INVESTMENT
MANAGER.—A 
program 
meets the requirements of this paragraph if the in-
vestment managers under the program are chosen 
by the Governor of the Virgin Islands. 
‘‘(5) 
SEPARATE
ACCOUNTING.—A 
program 
meets the requirements of this paragraph if the pro-
gram— 
‘‘(A) establishes separate accounts for each 
type of qualified retirement savings held for the 
benefit of each individual and any earnings 
properly allocable to such assets, and 
‘‘(B) maintains separate recordkeeping 
with respect to each account. 
‘‘(d) USE OF 1 PERCENT ANNUAL TAX.— 
‘‘(1) REVENUES TO THE VIRGIN ISLANDS DUR-
ING FIRST 20 YEARS.— 
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HR 3367 IH
‘‘(A) IN GENERAL.—Revenues from the tax 
referred to in subsection (c)(3)(B) shall be col-
lected, held, and distributed for the benefit of 
the Virgin Islands in a manner similar to sec-
tion 7652(b) of the Internal Revenue Code of 
1986 (Rum Excise Tax). 
‘‘(B) 
DISTRIBUTIONS
TO
VIRGIN
IS-
LANDS.—Funds and accrued interest described 
in subsection (d)(1)(A) may be paid from es-
crow to the Virgin Islands for expenditure only 
if— 
‘‘(i) the expenditure is pursuant to a 
qualified infrastructure development plan, 
and 
‘‘(ii) the expenditure is approved by 
the Secretary of the Interior as being pur-
suant to such plan. 
‘‘(C) QUALIFIED INFRASTRUCTURE DEVEL-
OPMENT
PLAN.—For purposes of this para-
graph, the term ‘qualified infrastructure devel-
opment plan’ means a plan for improving and 
enhancing the infrastructure of the Virgin Is-
lands which is— 
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‘‘(i) developed and approved by the 
committee described in subparagraph (D), 
and 
‘‘(ii) approved by the Governor of the 
Virgin Islands. 
‘‘(D) COMMITTEE.—The committee de-
scribed in this subparagraph is a committee— 
‘‘(i) comprised of 5 members, each 
serving a term of either three or five 
years— 
‘‘(I) 2 of whom are appointed by 
the Governor of the Virgin Islands, 
one for a 3-year and one for a 5-year 
term, 
‘‘(II) 2 of whom are appointed by 
the Virgin Islands legislature, one for 
a 3-year and one for a 5-year term, 
and 
‘‘(III) 1 of whom is appointed by 
the Secretary of the Interior for a 5- 
year term, and 
‘‘(ii) with respect to which a vacancy 
is filled in the manner in which the origi-
nal appointment was made. 
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