S.Amdt. 3402

SA 3402. Mr. LeMIEUX submitted an amendment intended to be proposed
to amendment SA 3336 proposed by Mr. Baucus to the bill H.R. 4213, to
amend the Internal Revenue Code of 1968 to extend certain expiring
provisions, and for other purposes; which was ordered to lie on the
table; as follows:

On page 268, between lines 11 and 12, insert the following:

SEC. ___. MODIFICATIONS TO RUM COVER-OVER PROGRAM.

(a) In General.--Section 7652 of the Internal Revenue Code
of 1986 is amended by adding at the end the following new
subsection:
``(h) Distribution of Rum Taxes Between Puerto Rico and the
Virgin Islands.--
``(1) In general.--Except as provided in paragraph (2), for
purposes of subsections (a)(3)(B), (b)(3)(B), and (e)(2), the
amount to be divided between and covered into the treasury of
any applicable territory under this subsection shall bear the
same ratio to the total amount covered into the treasuries of
all applicable territories under subsection (a)(3)(B),
(b)(3)(B), or (e)(2), as the case may be, as the population
of such applicable territory bears to the total combined
population of all applicable territories.
``(2) Transition rule.--In the case of any calendar year
before 2030, the amount to be divided between and covered
into the treasury of any applicable territory under this
subsection shall be equal to the sum of--
``(A) the amount which would be determined under subsection
(a)(3)(B), (b)(3)(B), or (e)(2), as the case may be, with
respect to such applicable territory before the date of the
enactment of this subsection, plus
``(B) the product of--
``(i) the transition percentage, and
``(ii) the difference of--

``(I) the amount which would be determined under paragraph
(1) for such calendar year if this paragraph did not apply,
minus
``(II) the amount described in subparagraph (A).

``(3) Definitions and other rules.--For purposes of this
section--
``(A) Applicable territory.--The term `applicable
territory' means Puerto Rico and the Virgin Islands.
``(B) Population.--For purposes of paragraph (1), the
respective populations of the applicable territories shall be
determined on the basis of the most recent census estimate of
the resident population of each released by the Bureau of the
Census before the beginning of the calendar year.
``(C) Transition percentage.--
``(i) In general.--The transition percentage for calendar
year 2010 is 5 percent.
``(ii) Subsequent years.--In the case of any calendar year
beginning after 2010, the transition percentage shall the
percentage (not to exceed 100 percent) equal to the sum of
the transition percentage for the preceding calendar year
plus 5 percentage points.''.
(b) Conforming Amendments.--
(1) Shipments from puerto rico.--Paragraph (3) of section
7652(a) of the Internal Revenue Code of 1986 is amended to
read as follows:
``(3) Deposit of internal revenue collections.--
``(A) In general.--Except as provided in subparagraph (B),
all taxes collected under the internal revenue laws of the
United States on articles produced in Puerto Rico and
transported to the United States (less the estimated amount
necessary for payment of refunds and drawbacks), or consumed
in the island, shall be covered into the treasury of Puerto
Rico.
``(B) Rum.--All taxes collected under the internal revenue
laws of the United States on rum (as defined in subsection
(e)(3)) produced in Puerto Rico and transported to the United
States (less the estimated amount necessary for payment of
refunds and drawbacks), or consumed in the island, shall be
divided between and covered into the treasuries of the
applicable territories as provided in subsection (i).''.
(2) Shipments from the virgin islands.--Paragraph (3) of
section 7652(b) of such Code is amended to read as follows:
``(3) Disposition of internal revenue collections.--
``(A) In general.--The Secretary shall determine the amount
of all taxes imposed by, and collected under the internal
revenue laws of the United States on articles not described
in subparagraph (B) which are produced in the Virgin Islands
and transported to the United States. The amount so
determined, plus the amounts determined with respect to the
Virgin Islands under subparagraph (B) and subsection
(a)(3)(B), less 1 percent of the total of such amounts and
less the estimated amount of refunds or credits, shall be
subject to disposition as follows:
``(i) The payment of an estimated amount shall be made to
the government of the Virgin Islands before the commencement
of each fiscal year as set forth in section 4(c)(2) of the
Act entitled `An Act to authorize appropriations for certain
insular areas of the United States, and for other purposes',
approved August 18, 1978 (48 U.S.C. 1645), as in effect on
the date of the enactment of the Trade and Development Act of
2000. The payment so made shall constitute a separate fund in
the treasury of the Virgin Islands and may be expended as the
legislature may determine.
``(ii) Any amounts remaining shall be deposited in the
Treasury of the United States as miscellaneous receipts.

If at the end of any fiscal year the total of the Federal
contribution made under clause (i) with respect to the four
calendar quarters immediately preceding the beginning of that
fiscal year has not been obligated or expended for an
approved purpose, the balance shall continue available for
expenditure during any succeeding fiscal year, but only for

[[Page S1188]]

emergency relief purposes and essential public projects. The
aggregate amount of moneys available for expenditure for
emergency relief purposes and essential public projects only
shall not exceed the sum of $5,000,000 at the end of any
fiscal year. Any unobligated or unexpended balance of the
Federal contribution remaining at the end of a fiscal year
which would cause the moneys available for emergency relief
purposes and essential public projects only to exceed the sum
of $5,000,000 shall thereupon be transferred and paid over to
the Treasury of the United States as miscellaneous receipts.
``(B) Rum.--The Secretary shall determine the amount of all
taxes imposed by, and collected under the internal revenue
laws of the United States on rum (as defined in subsection
(e)(3)) produced in the Virgin Islands and transported to the
United States. The amount so determined shall be divided
between and covered into the treasuries of the applicable
territories as provided in subsection (i).''.
(3) Other shipments to the united states.--Paragraph (2) of
section 7652(e) of such Code is amended to read as follows:
``(2) Distribution of taxes.--Such tax collections shall be
divided between Puerto Rico and the Virgin Islands as
provided in subsection (i). The Secretary shall prescribe by
regulation the timing and methods for transferring such tax
collections.''.
(c) Permanent Extension of Increased Limitation on Cover
Over.--Paragraph (1) of section 7652(f) of the Internal
Revenue Code of 1986 is amended by striking ``$10.50 ($13.25
in the case of distilled spirits brought into the United
States after June 30, 1999, and before January 1, 2010)'' and
inserting ``$13.25''.
(d) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxes
collected after the date of the enactment of this Act.
(2) Limitation on cover-over.--The amendment made by
subsection (c) shall apply to distilled spirits brought into
the United States after December 31, 2009.
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