[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3114 Introduced in House (IH)]







107th CONGRESS
  1st Session
                                H. R. 3114

   To amend the Internal Revenue Code of 1986 to make permanent the 
 increase in the cover over of tax on distilled spirits to Puerto Rico 
                        and the Virgin Islands.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 12, 2001

 Mr. Acevedo-Vila 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 make permanent the 
 increase in the cover over of tax on distilled spirits to 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. INCREASED COVER OVER OF TAX ON DISTILLED SPIRITS TO PUERTO 
              RICO AND VIRGIN ISLANDS MADE PERMANENT.

    (a) In General.--Section 7652 of the Internal Revenue Code of 1986 
(relating to limitation on cover over of tax on distilled spirits) is 
amended by striking subsection (f) and by redesignating subsections (g) 
and (h) as subsections (f) and (g), respectively.
    (b) Conforming Amendment.--Section 7652(f) of such Code (as so 
redesignated) is amended by striking ``subsection (f) of this section'' 
in paragraph (1)(B) and inserting ``section 5001(a)(1)''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2002.
    (d) Special Rule.--
            (1) In general.--For the 5-year period beginning after 
        January 1, 2002, the treasury of Puerto Rico shall make a 
        Conservation Trust Fund transfer within 30 days from the date 
        of each cover over payment made during such period to such 
        treasury under section 7652(e) of the Internal Revenue Code of 
        1986.
            (2) Conservation trust fund transfer.--
                    (A) In general.--For purposes of this subsection, 
                the term ``Conservation Trust Fund transfer'' means a 
                transfer to the Puerto Rico Conservation Trust Fund of 
                an amount equal to 50 cents per proof gallon of the 
                taxes imposed under section 5001 or section 7652 of 
                such Code on distilled spirits that are covered over to 
                the treasury of Puerto Rico under section 7652(e) of 
                such Code.
                    (B) Treatment of transfer.--Each Conservation Trust 
                Fund transfer shall be treated as principal for an 
                endowment, the income from which to be available for 
                use by the Puerto Rico Conservation Trust Fund for the 
                purposes for which the Trust Fund was established.
                    (C) Result of nontransfer.--
                            (i) In general.--Upon notification by the 
                        Secretary of the Interior that a Conservation 
                        Trust Fund transfer has not been made by the 
                        treasury of Puerto Rico during the period 
                        described in paragraph (1), the Secretary of 
                        the Treasury shall, except as provided in 
                        clause (ii), deduct and withhold from the next 
                        cover over payment to be made to the treasury 
                        of Puerto Rico under section 7652(e) of such 
                        Code an amount equal to the appropriate 
                        Conservation Trust Fund transfer and interest 
                        thereon at the underpayment rate established 
                        under section 6621 of such Code as of the due 
                        date of such transfer. The Secretary of the 
                        Treasury shall transfer such amount deducted 
                        and withheld, and the interest thereon, 
                        directly to the Puerto Rico Conservation Trust 
                        Fund.
                            (ii) Good cause exception.--If the 
                        Secretary of the Interior finds, after 
                        consultation with the Governor of Puerto Rico, 
                        that the failure by the treasury of Puerto Rico 
                        to make a required transfer was for good cause, 
                        and notifies the Secretary of the Treasury of 
                        the finding of such good cause before the due 
                        date of the next cover over payment following 
                        the notification of nontransfer, then the 
                        Secretary of the Treasury shall not deduct the 
                        amount of such nontransfer from any cover over 
                        payment.
            (3) Puerto rico conservation trust fund.--For purposes of 
        this subsection, the term ``Puerto Rico Conservation Trust 
        Fund'' means the fund established pursuant to a Memorandum of 
        Understanding between the United States Department of the 
        Interior and the Commonwealth of Puerto Rico, dated December 
        24, 1968.
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