[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 410 Introduced in House (IH)]

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116th CONGRESS
  1st Session
                                H. R. 410

To amend the Internal Revenue Code of 1986 to provide reimbursement for 
possessions of the United States with respect to the earned income tax 
                    credit and the child tax credit.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 9, 2019

 Ms. Plaskett 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 provide reimbursement for 
possessions of the United States with respect to the earned income tax 
                    credit and the child tax credit.

    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 ``Territorial Economic Growth and 
Recovery Act of 2019''.

SEC. 2. REIMBURSEMENT OF POSSESSIONS FOR COST OF EARNED INCOME TAX 
              CREDIT.

    (a) Earned Income Credit.--Section 32 of the Internal Revenue Code 
of 1986 is amended by adding at the end the following new subsection:
    ``(n) Treatment of Possessions.--
            ``(1) Payments to possessions.--
                    ``(A) Mirror code possession.--The Secretary of the 
                Treasury shall periodically (but not less frequently 
                than annually) pay to each possession of the United 
                States with a mirror code tax system amounts equal to 
                the loss to that possession by reason of the 
                application of this section (determined without regard 
                to paragraph (2)) with respect to taxable years 
                beginning after December 31, 2018. Such amounts shall 
                be determined by the Secretary of the Treasury based on 
                information provided by the government of the 
                respective possession.
                    ``(B) Other possessions.--The Secretary of the 
                Treasury shall periodically (but no less frequently 
                than annually) pay to each possession of the United 
                States which does not have a mirror code tax system 
                amounts estimated by the Secretary of the Treasury as 
                being equal to the aggregate benefits that would have 
                been provided to residents of such possession by reason 
                of the application of this section for taxable years 
                beginning after December 31, 2018, if a mirror code tax 
                system had been in effect in such possession. The 
                preceding sentence shall not apply with respect to any 
                possession of the United States unless such possession 
                has a plan, which has been approved by the Secretary of 
                the Treasury, under which such possession will promptly 
                distribute such payments to the residents of such 
                possession.
            ``(2) Coordination with credit allowed against united 
        states income taxes.--No credit shall be allowed under this 
        section for any taxable year to any person--
                    ``(A) to whom a credit is allowed against taxes 
                imposed by the possession by reason of this section 
                (determined without regard to this paragraph) for such 
                taxable year, or
                    ``(B) who is eligible for a payment under a plan 
                described in paragraph (1)(B) with respect to such 
                taxable year.
            ``(3) Definitions and special rules.--
                    ``(A) Possession of the united states.--For 
                purposes of this subsection, the term `possession of 
                the United States' shall include such possessions as 
                are specified in section 937(a)(1) of the Internal 
                Revenue Code of 1986.
                    ``(B) Mirror code tax system.--For purposes of this 
                subsection, the term `mirror code tax system' means, 
                with respect to any possession of the United States, 
                the income tax system of such possession if the income 
                tax liability of the residents of such possession under 
                such system is determined by reference to the income 
                tax laws of the United States as if such possession 
                were the United States, and such system includes a tax 
                credit substantially identical to the credit allowed 
                under this section.
                    ``(C) Treatment of payments.--For purposes of 
                section 1324(b)(2) of title 31, United States Code, or 
                any similar rule of law, any payment made under this 
                subsection shall be treated in the same manner as a 
                refund due from the credit allowed under this 
                section.''.
    (b) Effective Date.--The amendment made by this section shall apply 
with respect to taxable years beginning after December 31, 2018.

SEC. 3. REIMBURSEMENT OF POSSESSIONS FOR COST OF CHILD TAX CREDIT.

    (a) Child Tax Credit.--Section 24 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new subsection:
    ``(i) Treatment of Possessions.--
            ``(1) Payments to possessions.--
                    ``(A) Mirror code possession.--The Secretary of the 
                Treasury shall periodically (but not less frequently 
                than annually) pay to each possession of the United 
                States with a mirror code tax system amounts equal to 
                the loss to that possession by reason of the 
                application of this section (determined without regard 
                to paragraph (2)) with respect to taxable years 
                beginning after December 31, 2018. Such amounts shall 
                be determined by the Secretary of the Treasury based on 
                information provided by the government of the 
                respective possession.
                    ``(B) Other possessions.--The Secretary of the 
                Treasury shall periodically (but no less frequently 
                than annually) pay to each possession of the United 
                States which does not have a mirror code tax system 
                amounts estimated by the Secretary of the Treasury as 
                being equal to the aggregate benefits that would have 
                been provided to residents of such possession by reason 
                of the application of this section for taxable years 
                beginning after December 31, 2018, if a mirror code tax 
                system had been in effect in such possession. The 
                preceding sentence shall not apply with respect to any 
                possession of the United States unless such possession 
                has a plan, which has been approved by the Secretary of 
                the Treasury, under which such possession will promptly 
                distribute such payments to the residents of such 
                possession.
            ``(2) Coordination with credit allowed against united 
        states income taxes.--No credit shall be allowed under this 
        section for any taxable year to any person--
                    ``(A) to whom a credit is allowed against taxes 
                imposed by the possession by reason of this section 
                (determined without regard to this paragraph) for such 
                taxable year, or
                    ``(B) who is eligible for a payment under a plan 
                described in paragraph (1)(B) with respect to such 
                taxable year.
            ``(3) Definitions and special rules.--
                    ``(A) Possession of the united states.--For 
                purposes of this subsection, the term `possession of 
                the United States' shall include such possessions as 
                are specified in section 937(a)(1) of the Internal 
                Revenue Code of 1986.
                    ``(B) Mirror code tax system.--For purposes of this 
                subsection, the term `mirror code tax system' means, 
                with respect to any possession of the United States, 
                the income tax system of such possession if the income 
                tax liability of the residents of such possession under 
                such system is determined by reference to the income 
                tax laws of the United States as if such possession 
                were the United States, and such system includes a tax 
                credit substantially identical to the credit allowed 
                under this section.
                    ``(C) Treatment of payments.--For purposes of 
                section 1324(b)(2) of title 31, United States Code, or 
                any similar rule of law, any payment made under this 
                subsection shall be treated in the same manner as a 
                refund due from the credit allowed under this 
                section.''.
    (b) Effective Date.--The amendment made by this section shall apply 
with respect to taxable years beginning after December 31, 2018.
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