Tax Equity and Prosperity for Puerto Rican Families Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 2649 To provide for a Federal match for earned income credit expansion for Puerto Rico. IN THE HOUSE OF REPRESENTATIVES MAY 9, 2019 Mr. PASCRELL (for himself, Mr. BEYER, Mr. GRIJALVA, Mr. HIGGINS of New York, Mr. SOTO, Mrs. WATSON COLEMAN, Ms. VELA´ZQUEZ, Ms. LEE of California, and Miss GONZA´LEZ-COLO´N of Puerto Rico) introduced the following bill; which was referred to the Committee on Natural Resources A BILL To provide for a Federal match for earned income credit expansion for Puerto Rico. 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 ‘‘Tax Equity and Pros- 4 perity for Puerto Rican Families Act of 2019’’. 5 SEC. 2. EARNED INCOME CREDIT EXPANSION FOR PUERTO 6 RICO. 7 (a) IN GENERAL.—Subsequent to an amendment of 8 the Puerto Rico Internal Revenue Code of 2011 expanding 9 VerDate Sep 11 2014 05:42 May 22, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2649.IH H2649 kjohnson on DSK79L0C42 with BILLS 2 •HR 2649 IH the earned income credit added by Act 257–2018 in a 1 manner that both reduces poverty and encourages labor 2 force participation, the Secretary of the Treasury shall 3 make annual payments to Puerto Rico in the amount de- 4 termined under subsection (b). Such payments shall be 5 made only if Puerto Rico provides to the Secretary of the 6 Treasury— 7 (1) a report prepared by the Secretary of the 8 Treasury of Puerto Rico of the estimated cost of 9 such expansion in the first year that the expanded 10 earned income credit will be paid by Puerto Rico; 11 and 12 (2) annually thereafter, a report prepared by 13 the Secretary of the Treasury of Puerto Rico of the 14 estimated cost of such expansion in the year of the 15 report and an updated estimate of the actual cost of 16 such expansion in the preceding year. 17 Puerto Rico shall submit to the Secretary the report in 18 paragraph (1) or (2) on or after January 15 of the year 19 in which the expanded earned income credit will be paid 20 in Puerto Rico, and the Secretary shall make each annual 21 payment within three weeks of receiving the report. 22 (b) ANNUAL PAYMENT.— 23 (1) The payment in any year shall comprise the 24 base payment for that year and the adjustment for 25 VerDate Sep 11 2014 05:42 May 22, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2649.IH H2649 kjohnson on DSK79L0C42 with BILLS 3 •HR 2649 IH any underpayment or overpayment made in the prior 1 year. 2 (2) The base payment for a year shall be the 3 estimated cost for that year under subsection (a) or 4 $612,000,000, whichever is less. 5 (3) The adjustment for a year shall be an in- 6 crease equal to any underpayment in the prior year, 7 or a decrease equal to any overpayment in the prior 8 year. 9 (A) An underpayment in the prior year is 10 the amount by which the base payment in the 11 prior year would have been higher if the esti- 12 mated cost in the prior year under subsection 13 (a) had equaled the updated estimate of the ac- 14 tual cost in the prior year under subsection 15 (a)(2). 16 (B) An overpayment in the prior year is 17 the amount by which the base payment in the 18 prior year would have been lower if the esti- 19 mated cost in the prior year under subsection 20 (a) had equaled the updated estimate of the ac- 21 tual cost in the prior year under subsection 22 (a)(2). 23 (c) COST OF EXPANSION.—For purposes of this sec- 24 tion, the cost of expanding the earned income credit in 25 VerDate Sep 11 2014 05:42 May 22, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2649.IH H2649 kjohnson on DSK79L0C42 with BILLS 4 •HR 2649 IH Puerto Rico as described in subsection (a) for a year shall 1 include only the cost of the amendments made as de- 2 scribed in such subsection relative to the cost of laws in 3 effect on the date of the enactment of this Act as if those 4 laws had remained in effect. 5 (d) REPORTING REQUIREMENTS.—When the Sec- 6 retary of the Treasury of Puerto Rico submits to the Sec- 7 retary of the Treasury the report in subsection (a), then 8 the Secretary of the Treasury of Puerto Rico shall submit 9 at the same time a separate report on the application of 10 the Puerto Rico earned income credit, including the num- 11 ber of beneficiaries and household composition, average 12 benefits for different households, participation rates for el- 13 igible populations, error rates and other compliance mat- 14 ters, and the effects of the credit on labor force participa- 15 tion and poverty reduction. 16 (e) OUTREACH GRANT.—In addition to the payments 17 under subsection (a), the Secretary of the Treasury shall 18 make a one-time grant in the amount of $5,000,000 to 19 Puerto Rico immediately after the enactment by Puerto 20 Rico of an expansion of its earned income credit as re- 21 ferred to in subsection (a), for the purpose of taxpayer 22 education efforts relating to the earned income credit, in- 23 cluding education of paid tax preparers. 24 VerDate Sep 11 2014 05:42 May 22, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2649.IH H2649 kjohnson on DSK79L0C42 with BILLS 5 •HR 2649 IH (f) APPROPRIATIONS.—There are hereby appro- 1 priated to the Secretary of the Treasury such sums as are 2 necessary to carry out the purposes of this section. 3 (g) ADJUSTMENT FOR INFLATION.— 4 (1) IN GENERAL.—For each calendar year be- 5 ginning after the year of the first payment made 6 under subsection (b), the $612,000,000 amount in 7 that subsection shall be increased by an amount 8 equal to— 9 (A) such dollar amount; multiplied by 10 (B) the cost-of-living adjustment deter- 11 mined under section 1(f)(3) of the Internal 12 Revenue Code of 1986, determined by sub- 13 stituting the calendar year preceding the year 14 of the first payment made under subsection (b) 15 for ‘‘2016’’ in subparagraph (A)(ii) thereof. 16 (2) ROUNDING.—If any amount calculated 17 under paragraph (1) is not a multiple of $500, such 18 amount shall be rounded to the next lower multiple 19 of $500. 20 Æ VerDate Sep 11 2014 05:42 May 22, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\H2649.IH H2649 kjohnson on DSK79L0C42 with BILLS