I 118TH CONGRESS 1ST SESSION H. R. 3146 To amend the Internal Revenue Code of 1986 to modify the cover over of certain distilled spirits taxes. IN THE HOUSE OF REPRESENTATIVES MAY 9, 2023 Mrs. GONZA´LEZ-COLO´N (for herself and 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 modify the cover over of certain distilled spirits taxes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. COVER OVER OF CERTAIN DISTILLED SPIRITS 3 TAXES. 4 (a) REPEAL OF LIMITATION ON COVER OVER OF 5 DISTILLED SPIRITS TAXES TO PUERTO RICO AND VIRGIN 6 ISLANDS.— 7 (1) IN GENERAL.—Section 7652 of the Internal 8 Revenue Code of 1986 is amended by striking sub- 9 section (f). 10 VerDate Sep 11 2014 22:39 May 21, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3146.IH H3146 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •HR 3146 IH (2) CONFORMING AMENDMENT.—Section 1 7652(g)(1) of such Code is amended— 2 (A) by striking subparagraph (B), and 3 (B) by striking ‘‘as if—’’ and all that fol- 4 lows through ‘‘the use and tax’’ and inserting 5 ‘‘as if the use and tax’’. 6 (3) EFFECTIVE DATE.—The amendments made 7 by this subsection shall apply to distilled spirits 8 brought into the United States after December 31, 9 2021. 10 (b) REQUIRED TRANSFER TO PUERTO RICO CON- 11 SERVATION TRUST FUND OF PORTION OF PUERTO RICO 12 RUM COVER OVER.— 13 (1) IN GENERAL.—Section 7652(a) of the In- 14 ternal Revenue Code of 1986 is amended by adding 15 at the end the following new paragraph: 16 ‘‘(4) REQUIRED TRANSFER TO PUERTO RICO 17 CONSERVATION TRUST FUND OF PORTION OF RUM 18 TAXES COVERED OVER.— 19 ‘‘(A) IN GENERAL.—From any taxes col- 20 lected on rum transported to the United States 21 that are covered into the treasury of Puerto 22 Rico under paragraph (3) at a rate equal to or 23 greater than $10.50 per proof gallon, Puerto 24 Rico shall transfer to the Puerto Rico Con- 25 VerDate Sep 11 2014 22:39 May 21, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3146.IH H3146 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •HR 3146 IH servation Trust Fund an amount per proof gal- 1 lon equal to or greater than 1⁄6 of the difference 2 between $10.50 and the rate, not to exceed 3 $13.25, at which such taxes are covered into 4 such treasury. Puerto Rico’s obligations under 5 this paragraph shall not modify or impair pay- 6 ment priorities established under Puerto Rico 7 law and in effect on December 31, 2022. 8 ‘‘(B) PUERTO RICO CONSERVATION TRUST 9 FUND.—For purposes of this section, the term 10 ‘Puerto Rico Conservation Trust Fund’ means 11 the fund which— 12 ‘‘(i) was established pursuant to a 13 Memorandum of Understanding between 14 the United States Department of the Inte- 15 rior and the Commonwealth of Puerto 16 Rico, dated December 24, 1968, and 17 ‘‘(ii) provides for the conservation of 18 natural areas in Puerto Rico, including 19 through sustainable agriculture efforts and 20 the reforestation and restoration of Puerto 21 Rico’s natural habitats.’’. 22 (2) COVER OVER DETERMINED WITHOUT RE- 23 GARD TO CERTAIN RATE REDUCTIONS.—Section 24 VerDate Sep 11 2014 22:39 May 21, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3146.IH H3146 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •HR 3146 IH 7652(i) of such Code, as amended by subsection (c), 1 is amended by inserting ‘‘(a)(4),’’ after ‘‘(a)(3),’’. 2 (3) EFFECTIVE DATE.—The amendments made 3 by this subsection shall apply to articles containing 4 distilled spirits brought into the United States after 5 December 31, 2021. 6 (c) RETROACTIVE APPLICATION OF RULES RELAT- 7 ING TO DETERMINATION OF COVER OVER.—Notwith- 8 standing section 107(a)(3) of division EE of Public Law 9 116–260— 10 (1) the amendments made section 107(a)(2)(A) 11 thereof shall take effect as if included in section 12 13807 of Public Law 115–97, and 13 (2) the amendments made by section 14 107(a)(2)(B) thereof shall take effect as if included 15 in section 41102 of Public Law 115–123. 16 Æ VerDate Sep 11 2014 22:39 May 21, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\H3146.IH H3146 pbinns on DSKJLVW7X2PROD with $$_JOB