Title: Tax Equity and Prosperity for Puerto Rican Families Act of 2019
Policy area: Taxation

Summary:
Tax Equity and Prosperity for Puerto Rican Families Act of 2019
This bill requires the Department of the Treasury to make specified annual federal matching payments to Puerto Rico for expanding its earned income tax credit as specified in the bill.
After the tax credit is expanded, Treasury must also provide a one-time grant to Puerto Rico for taxpayer education efforts relating to the earned income tax credit, including education of paid tax preparers.
The bill also provides appropriations to carry out the programs established by this bill.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2649 Introduced in House (IH)]

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116th CONGRESS
  1st Session
                                H. R. 2649

 To provide for a Federal match for earned income credit expansion for 
                              Puerto Rico.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 9, 2019

Mr. Pascrell (for himself, Mr. Beyer, Mr. Grijalva, Mr. Higgins of New 
    York, Mr. Soto, Mrs. Watson Coleman, Ms. Velazquez, Ms. Lee of 
  California, and Miss Gonzalez-Colon of Puerto Rico) introduced the 
    following bill; which was referred to the Committee on Natural 
                               Resources

_______________________________________________________________________

                                 A BILL


 
 To provide for a Federal match for earned income credit expansion for 
                              Puerto Rico.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Tax Equity and Prosperity for Puerto 
Rican Families Act of 2019''.

SEC. 2. EARNED INCOME CREDIT EXPANSION FOR PUERTO RICO.

    (a) In General.--Subsequent to an amendment of the Puerto Rico 
Internal Revenue Code of 2011 expanding the earned income credit added 
by Act 257-2018 in a manner that both reduces poverty and encourages 
labor force participation, the Secretary of the Treasury shall make 
annual payments to Puerto Rico in the amount determined under 
subsection (b). Such payments shall be made only if Puerto Rico 
provides to the Secretary of the Treasury--
            (1) a report prepared by the Secretary of the Treasury of 
        Puerto Rico of the estimated cost of such expansion in the 
        first year that the expanded earned income credit will be paid 
        by Puerto Rico; and
            (2) annually thereafter, a report prepared by the Secretary 
        of the Treasury of Puerto Rico of the estimated cost of such 
        expansion in the year of the report and an updated estimate of 
        the actual cost of such expansion in the preceding year.
Puerto Rico shall submit to the Secretary the report in paragraph (1) 
or (2) on or after January 15 of the year in which the expanded earned 
income credit will be paid in Puerto Rico, and the Secretary shall make 
each annual payment within three weeks of receiving the report.
    (b) Annual Payment.--
            (1) The payment in any year shall comprise the base payment 
        for that year and the adjustment for any underpayment or 
        overpayment made in the prior year.
            (2) The base payment for a year shall be the estimated cost 
        for that year under subsection (a) or $612,000,000, whichever 
        is less.
            (3) The adjustment for a year shall be an increase equal to 
        any underpayment in the prior year, or a decrease equal to any 
        overpayment in the prior year.
                    (A) An underpayment in the prior year is the amount 
                by which the base payment in the prior year would have 
                been higher if the estimated cost in the prior year 
                under subsection (a) had equaled the updated estimate 
                of the actual cost in the prior year under subsection 
                (a)(2).
                    (B) An overpayment in the prior year is the amount 
                by which the base payment in the prior year would have 
                been lower if the estimated cost in the prior year 
                under subsection (a) had equaled the updated estimate 
                of the actual cost in the prior year under subsection 
                (a)(2).
    (c) Cost of Expansion.--For purposes of this section, the cost of 
expanding the earned income credit in Puerto Rico as described in 
subsection (a) for a year shall include only the cost of the amendments 
made as described in such subsection relative to the cost of laws in 
effect on the date of the enactment of this Act as if those laws had 
remained in effect.
    (d) Reporting Requirements.--When the Secretary of the Treasury of 
Puerto Rico submits to the Secretary of the Treasury the report in 
subsection (a), then the Secretary of the Treasury of Puerto Rico shall 
submit at the same time a separate report on the application of the 
Puerto Rico earned income credit, including the number of beneficiaries 
and household composition, average benefits for different households, 
participation rates for eligible populations, error rates and other 
compliance matters, and the effects of the credit on labor force 
participation and poverty reduction.
    (e) Outreach Grant.--In addition to the payments under subsection 
(a), the Secretary of the Treasury shall make a one-time grant in the 
amount of $5,000,000 to Puerto Rico immediately after the enactment by 
Puerto Rico of an expansion of its earned income credit as referred to 
in subsection (a), for the purpose of taxpayer education efforts 
relating to the earned income credit, including education of paid tax 
preparers.
    (f) Appropriations.--There are hereby appropriated to the Secretary 
of the Treasury such sums as are necessary to carry out the purposes of 
this section.
    (g) Adjustment for Inflation.--
            (1) In general.--For each calendar year beginning after the 
        year of the first payment made under subsection (b), the 
        $612,000,000 amount in that subsection shall be increased by an 
        amount equal to--
                    (A) such dollar amount; multiplied by
                    (B) the cost-of-living adjustment determined under 
                section 1(f)(3) of the Internal Revenue Code of 1986, 
                determined by substituting the calendar year preceding 
                the year of the first payment made under subsection (b) 
                for ``2016'' in subparagraph (A)(ii) thereof.
            (2) Rounding.--If any amount calculated under paragraph (1) 
        is not a multiple of $500, such amount shall be rounded to the 
        next lower multiple of $500.
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