[Congressional Record (Bound Edition), Volume 157 (2011), Part 8]
[House]
[Pages 11836-11837]
[From the U.S. Government Publishing Office, www.gpo.gov]




                               AMENDMENTS

  Under clause 8 of rule XVIII, proposed amendments were submitted as 
follows:

                               H.R. 2584

                      Offered By: Mrs. Christensen

       Amendment No. 3: At the end of the bill (before the short 
     title), insert the following:

    TITLE VII--DEREK M. HODGE VIRGIN ISLANDS IMPROVEMENT ACT OF 2011

     SEC. 701. SHORT TITLE.

       This title may be cited as the ``Derek M. Hodge Virgin 
     Islands Improvement Act of 2011''.

     SEC. 702. TAX-FREE DISTRIBUTIONS FROM CERTAIN RETIREMENT PLAN 
                   ASSETS INVESTED UNDER A VIRGIN ISLANDS 
                   INVESTMENT PROGRAM.

       (a) In General.--Part I of subchapter D of chapter 1 of the 
     Internal Revenue Code of 1986 (relating to pension, profit-
     sharing, stock bonus plans, etc.) is amended by adding at the 
     end the following new section:

     ``SEC. 409B. TREATMENT OF DISTRIBUTIONS FROM CERTAIN 
                   RETIREMENT PLAN ASSETS INVESTED UNDER A VIRGIN 
                   ISLANDS INVESTMENT PROGRAM.

       ``(a) In General.--If an individual under the age of 61 
     makes a one-time designation of an amount of qualified 
     retirement savings as being under investment by the Virgin 
     Islands Investment 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 subsection (b)(1), or
       ``(2) as a Roth IRA in the case of qualified retirement 
     savings described in subsection (b)(2).

      No amount shall be includible in gross income by reason of 
     the change in treatment under the preceding sentence.
       ``(b) Qualified Retirement Savings.--For purposes of this 
     section, the term `qualified retirement savings' 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 management.--A program 
     meets the requirements of this paragraph if the amount 
     accepted for management 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 managers 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,
       ``(B) the program imposes an annual tax (in addition to the 
     fees permitted under subparagraph (A)) equal to--
       ``(i) 1.5 percent of the amount designated for management 
     under the program for the first 10 years of the account, and
       ``(ii) 1 percent of the amount designated for management 
     under the program for the remainder of the life of the 
     account without regard to account balance, and
       ``(C) the 1 percent tax is imposed notwithstanding the Roth 
     designation.
       ``(4) Investment manager.--A program meets the requirements 
     of this paragraph if the investment 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 program--
       ``(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 during first 20 
     years.--
       ``(A) In general.--Revenues from the tax referred to in 
     subsection (c)(3)(B) shall be collected, held, and 
     distributed for the benefit of the Virgin Islands in a manner 
     similar to section 7652(b) (relating to rum excise tax).
       ``(B) Distributions to virgin islands.--Funds and accrued 
     interest described in subsection (d)(1)(A) may be paid from 
     escrow 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 pursuant to such plan.
       ``(C) Qualified infrastructure development plan.--For 
     purposes of this paragraph, the term `qualified 
     infrastructure development plan' means a plan for improving 
     and enhancing the infrastructure of the Virgin Islands which 
     is--
       ``(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 described 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 original appointment was made.
       ``(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 10 years under management by the 
     Virgin Islands Investment Program shall be collected by the 
     United States Treasury in a manner similar to section 7652, 
     upon which--
       ``(i) \1/3\ of the proceeds shall be distributed to the 
     Virgin Islands for the first 10 years of management, and
       ``(ii) half of the proceeds shall be distributed to the 
     Virgin Islands for the next 10 years of management.
       ``(B) After the first 20 years.--Beginning 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 withdraw 
     money from the account during the minimum holding period, the 
     investor would forfeit the tax advantages of the Fund. Any 
     funds so withdrawn would be included in gross income and 
     subject to Federal income tax, minus payments of the 1 
     percent tax.
       ``(3) Early withdrawal.--Should an investor withdraw the 
     entire balance of the funds

[[Page 11837]]

     after the 10-year minimum holding period but before the end 
     of the 30 years, his account will be liable for the entire 1 
     percent tax for each of the remaining years.
       ``(e) Other Definitions.--For purposes of this section--
       ``(1) Elective deferrals; applicable retirement 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 Islands' 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 following new 
     item:

``Sec. 409B. Treatment of distributions from certain retirement plan 
              assets invested under a Virgin Islands investment 
              program.''.

       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.