[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 3208 Introduced in Senate (IS)]

111th CONGRESS
  2d Session
                                S. 3208

 To amend the Internal Revenue Code of 1986 to provide a special rule 
for allocating the cover over of distilled spirits taxes between Puerto 
                      Rico and the Virgin Islands.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 15, 2010

  Mr. Menendez (for himself, Mr. Cochran, Mr. Nelson of Florida, Mr. 
LeMieux, and Mr. Kaufman) introduced the following bill; which was read 
             twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to provide a special rule 
for allocating the cover over of distilled spirits taxes between Puerto 
                      Rico and the Virgin Islands.

    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 ``Reinvesting in U.S. Territories, Not 
Corporations Act''.

SEC. 2. SPECIAL RULE FOR ALLOCATING DISTILLED SPIRITS TAXES BETWEEN 
              PUERTO RICO AND THE VIRGIN ISLANDS.

    (a) In General.--Section 7652 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(i) Reduction of Cover Over for Unreasonable and Excessive Rum 
Subsidies.--
            ``(1) In general.--For purposes of this section, with 
        respect to taxes imposed under section 5001 or this section on 
        distilled spirits, the amount covered into the treasury of any 
        covered government (after the application of subsection (f)) in 
        any calendar year shall be reduced (but not below zero) by the 
        sum of--
                    ``(A) the amount of any unreasonable and excessive 
                rum subsidy paid or incurred by such government in the 
                preceding calendar year, and
                    ``(B) the amount of any unreasonable and excessive 
                rum subsidy paid or incurred by such government for any 
                calendar year preceding such preceding calendar year 
                which has not been taken into account to reduce the 
                amount so covered for any preceding calendar year.
            ``(2) Unreasonable and excessive rum subsidy.--
                    ``(A) In general.--For any calendar year, the 
                unreasonable and excessive rum subsidy paid by any 
                covered government during such calendar year is the 
                amount of the excess, if any, of--
                            ``(i) the aggregate amount of direct and 
                        indirect government assistance paid or incurred 
                        in such calendar year by such government to all 
                        persons that produce distilled spirits in the 
                        geographical area governed by such government 
                        for consumption or sale in such geographical 
                        area or in the United States, over
                            ``(ii) the amount that is 10 percent of the 
                        amounts which would (but for this subsection) 
                        be covered into the treasury of such government 
                        under subsection (a)(3) or (b)(3), whichever is 
                        applicable, in such calendar year (without 
                        regard to amounts covered into such treasury 
                        under subsection (e)).
                    ``(B) Direct government assistance.--For purposes 
                of subparagraph (A)(i), direct government assistance 
                includes any transfer of funds, grant, loan, equity 
                investment, loan guarantee, production or marketing 
                incentive, income or price support, provision of goods 
                or services other than generally available 
                infrastructure and public services, and such other 
                assistance provided by a covered government as the 
                Secretary identifies as consistent with the purposes of 
                this subsection.
                    ``(C) Indirect government assistance.--For purposes 
                of subparagraph (A)(i), indirect government assistance 
                includes any amounts expended by a covered government 
                to promote, market, or otherwise support the rum 
                industry in the geographical area governed by such 
                government, to pay interest on, and expenses related 
                to, indebtedness incurred, the proceeds of which are 
                used to provide rum subsidies, and for any other 
                purpose identified by the Secretary as consistent with 
                the purposes of this subsection.
            ``(3) Covered government.--For purposes of this subsection, 
        the term `covered government' means the government of Puerto 
        Rico and the government of the Virgin Islands.
            ``(4) Regulations.--The Secretary may prescribe regulations 
        and guidance as necessary or appropriate to carry out the 
        purposes of this subsection, including regulations requiring 
        annual reports to be submitted by covered governments reporting 
        the amount of direct and indirect government assistance 
        provided to persons that produce distilled spirits, the 
        monetary value of such assistance, and any other information as 
        required by the Secretary.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to deposits made under subsection (a)(3) or (b)(3) of section 7652 of 
the Internal Revenue Code of 1986 for calendar years beginning after 
December 31, 2009.
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