‘‘(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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‘‘(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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‘‘(2) REVENUES TO THE UNITED STATES AND 
THE VIRGIN ISLANDS.— 
‘‘(A) DURING FIRST 20 YEARS.—Revenues 
from the fee referred to in subsection (c)(3)(B) 
imposed on designated assets after the first 20 
years under management by the Virgin Islands 
Investment Program shall be collected by the 
United States Treasury in a manner similar to 
section 7652 of the Internal Revenue Code, 
upon which half of the proceeds shall be distrib-
uted to the Virgin Islands for the first 20 years 
of management. 
‘‘(B) AFTER THE FIRST 20 YEARS.—Begin-
ning in the 21st year, the entire 1 percent tax 
collected shall be retained by the United States 
Treasury. 
‘‘(C) MINIMUM
HOLDING
PERIOD.—No 
withdrawals may be made by an investor from 
the account during the minimum holding period 
of ten years. Should the investor choose to with-
draw money from the account during the min-
imum holding period, the investor would forfeit 
the tax advantages of the Fund; any funds 
withdrawn would be included in gross income 
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and subject to Federal income tax, minus pay-
ments of the 1 percent tax. 
‘‘(3) EARLY WITHDRAWAL.—Should an investor 
withdraw the entire balance of the funds after the 
10-year minimum holding period but before the end 
of the 30 years, his account will be liable for the en-
tire 1 percent tax for each of the remaining years. 
‘‘(e) OTHER DEFINITIONS.—For purposes of this 
section— 
‘‘(1) ELECTIVE DEFERRALS; APPLICABLE RE-
TIREMENT PLAN.—The terms ‘elective deferrals’ and 
‘applicable retirement plan’ have the respective 
meanings given such terms by section 402A. 
‘‘(2) VIRGIN ISLANDS.—The term ‘Virgin Is-
lands’ means the United States Virgin Islands. 
‘‘(3) SECRETARY OF THE INTERIOR.—The term 
‘Secretary of the Interior’ means the Secretary of 
the Interior or his designee.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for such part I is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 409B. Treatment of distributions from certain retirement plan assets in-
vested under a Virgin Islands investment program.’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act. 
Æ 
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