Territorial Economic Growth and Recovery Act of 2019

I 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 Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Territorial Economic 4 Growth and Recovery Act of 2019’’. 5 VerDate Sep 11 2014 02:21 Jan 20, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H410.IH H410 pbinns on DSK79D2C42PROD with BILLS 2 •HR 410 IH SEC. 2. REIMBURSEMENT OF POSSESSIONS FOR COST OF 1 EARNED INCOME TAX CREDIT. 2 (a) EARNED INCOME CREDIT.—Section 32 of the In- 3 ternal Revenue Code of 1986 is amended by adding at the 4 end the following new subsection: 5 ‘‘(n) TREATMENT OF POSSESSIONS.— 6 ‘‘(1) PAYMENTS TO POSSESSIONS.— 7 ‘‘(A) MIRROR CODE POSSESSION.—The 8 Secretary of the Treasury shall periodically (but 9 not less frequently than annually) pay to each 10 possession of the United States with a mirror 11 code tax system amounts equal to the loss to 12 that possession by reason of the application of 13 this section (determined without regard to para- 14 graph (2)) with respect to taxable years begin- 15 ning after December 31, 2018. Such amounts 16 shall be determined by the Secretary of the 17 Treasury based on information provided by the 18 government of the respective possession. 19 ‘‘(B) OTHER POSSESSIONS.—The Sec- 20 retary of the Treasury shall periodically (but no 21 less frequently than annually) pay to each pos- 22 session of the United States which does not 23 have a mirror code tax system amounts esti- 24 mated by the Secretary of the Treasury as 25 being equal to the aggregate benefits that would 26 VerDate Sep 11 2014 02:21 Jan 20, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H410.IH H410 pbinns on DSK79D2C42PROD with BILLS 3 •HR 410 IH have been provided to residents of such posses- 1 sion by reason of the application of this section 2 for taxable years beginning after December 31, 3 2018, if a mirror code tax system had been in 4 effect in such possession. The preceding sen- 5 tence shall not apply with respect to any posses- 6 sion of the United States unless such possession 7 has a plan, which has been approved by the 8 Secretary of the Treasury, under which such 9 possession will promptly distribute such pay- 10 ments to the residents of such possession. 11 ‘‘(2) COORDINATION WITH CREDIT ALLOWED 12 AGAINST UNITED STATES INCOME TAXES.—No cred- 13 it shall be allowed under this section for any taxable 14 year to any person— 15 ‘‘(A) to whom a credit is allowed against 16 taxes imposed by the possession by reason of 17 this section (determined without regard to this 18 paragraph) for such taxable year, or 19 ‘‘(B) who is eligible for a payment under 20 a plan described in paragraph (1)(B) with re- 21 spect to such taxable year. 22 ‘‘(3) DEFINITIONS AND SPECIAL RULES.— 23 ‘‘(A) POSSESSION OF THE UNITED 24 STATES.—For purposes of this subsection, the 25 VerDate Sep 11 2014 02:21 Jan 20, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H410.IH H410 pbinns on DSK79D2C42PROD with BILLS 4 •HR 410 IH term ‘possession of the United States’ shall in- 1 clude such possessions as are specified in sec- 2 tion 937(a)(1) of the Internal Revenue Code of 3 1986. 4 ‘‘(B) MIRROR CODE TAX SYSTEM.—For 5 purposes of this subsection, the term ‘mirror 6 code tax system’ means, with respect to any 7 possession of the United States, the income tax 8 system of such possession if the income tax li- 9 ability of the residents of such possession under 10 such system is determined by reference to the 11 income tax laws of the United States as if such 12 possession were the United States, and such 13 system includes a tax credit substantially iden- 14 tical to the credit allowed under this section. 15 ‘‘(C) TREATMENT OF PAYMENTS.—For 16 purposes of section 1324(b)(2) of title 31, 17 United States Code, or any similar rule of law, 18 any payment made under this subsection shall 19 be treated in the same manner as a refund due 20 from the credit allowed under this section.’’. 21 (b) EFFECTIVE DATE.—The amendment made by 22 this section shall apply with respect to taxable years begin- 23 ning after December 31, 2018. 24 VerDate Sep 11 2014 02:21 Jan 20, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H410.IH H410 pbinns on DSK79D2C42PROD with BILLS 5 •HR 410 IH SEC. 3. REIMBURSEMENT OF POSSESSIONS FOR COST OF 1 CHILD TAX CREDIT. 2 (a) CHILD TAX CREDIT.—Section 24 of the Internal 3 Revenue Code of 1986 is amended by adding at the end 4 the following new subsection: 5 ‘‘(i) TREATMENT OF POSSESSIONS.— 6 ‘‘(1) PAYMENTS TO POSSESSIONS.— 7 ‘‘(A) MIRROR CODE POSSESSION.—The 8 Secretary of the Treasury shall periodically (but 9 not less frequently than annually) pay to each 10 possession of the United States with a mirror 11 code tax system amounts equal to the loss to 12 that possession by reason of the application of 13 this section (determined without regard to para- 14 graph (2)) with respect to taxable years begin- 15 ning after December 31, 2018. Such amounts 16 shall be determined by the Secretary of the 17 Treasury based on information provided by the 18 government of the respective possession. 19 ‘‘(B) OTHER POSSESSIONS.—The Sec- 20 retary of the Treasury shall periodically (but no 21 less frequently than annually) pay to each pos- 22 session of the United States which does not 23 have a mirror code tax system amounts esti- 24 mated by the Secretary of the Treasury as 25 being equal to the aggregate benefits that would 26 VerDate Sep 11 2014 02:21 Jan 20, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H410.IH H410 pbinns on DSK79D2C42PROD with BILLS 6 •HR 410 IH have been provided to residents of such posses- 1 sion by reason of the application of this section 2 for taxable years beginning after December 31, 3 2018, if a mirror code tax system had been in 4 effect in such possession. The preceding sen- 5 tence shall not apply with respect to any posses- 6 sion of the United States unless such possession 7 has a plan, which has been approved by the 8 Secretary of the Treasury, under which such 9 possession will promptly distribute such pay- 10 ments to the residents of such possession. 11 ‘‘(2) COORDINATION WITH CREDIT ALLOWED 12 AGAINST UNITED STATES INCOME TAXES.—No cred- 13 it shall be allowed under this section for any taxable 14 year to any person— 15 ‘‘(A) to whom a credit is allowed against 16 taxes imposed by the possession by reason of 17 this section (determined without regard to this 18 paragraph) for such taxable year, or 19 ‘‘(B) who is eligible for a payment under 20 a plan described in paragraph (1)(B) with re- 21 spect to such taxable year. 22 ‘‘(3) DEFINITIONS AND SPECIAL RULES.— 23 ‘‘(A) POSSESSION OF THE UNITED 24 STATES.—For purposes of this subsection, the 25 VerDate Sep 11 2014 02:21 Jan 20, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H410.IH H410 pbinns on DSK79D2C42PROD with BILLS 7 •HR 410 IH term ‘possession of the United States’ shall in- 1 clude such possessions as are specified in sec- 2 tion 937(a)(1) of the Internal Revenue Code of 3 1986. 4 ‘‘(B) MIRROR CODE TAX SYSTEM.—For 5 purposes of this subsection, the term ‘mirror 6 code tax system’ means, with respect to any 7 possession of the United States, the income tax 8 system of such possession if the income tax li- 9 ability of the residents of such possession under 10 such system is determined by reference to the 11 income tax laws of the United States as if such 12 possession were the United States, and such 13 system includes a tax credit substantially iden- 14 tical to the credit allowed under this section. 15 ‘‘(C) TREATMENT OF PAYMENTS.—For 16 purposes of section 1324(b)(2) of title 31, 17 United States Code, or any similar rule of law, 18 any payment made under this subsection shall 19 be treated in the same manner as a refund due 20 from the credit allowed under this section.’’. 21 (b) EFFECTIVE DATE.—The amendment made by 22 this section shall apply with respect to taxable years begin- 23 ning after December 31, 2018. 24 Æ VerDate Sep 11 2014 02:21 Jan 20, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\H410.IH H410 pbinns on DSK79D2C42PROD with BILLS