I 
112TH CONGRESS 
1ST SESSION H. R. 1883 
To amend the Internal Revenue Code of 1986 to regulate the subsidies 
paid to rum producers in Puerto Rico and the Virgin Islands, and 
for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 12, 2011 
Mr. PIERLUISI (for himself, Mr. ISSA, Mr. SERRANO, Ms. ROS-LEHTINEN, Mr. 
GRIMM, Mr. JONES, Mr. BURTON of Indiana, and Mr. YOUNG of Alaska) 
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 regulate 
the subsidies paid to rum producers in Puerto Rico and 
the Virgin Islands, and for other purposes. 
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
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This Act may be cited as the ‘‘Investing in U.S. Ter-
4
ritories, Not Corporations Act of 2011’’. 
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SEC. 2. LIMITATION ON GOVERNMENT ASSISTANCE TO RUM 
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PRODUCERS. 
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Subsection (e) of section 7652 of the Internal Rev-
3
enue Code of 1986 (relating to shipments of rum to the 
4
United States) is amended by redesignating paragraphs 
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(3) and (4) as paragraphs (4) and (5), respectively, and 
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by inserting after paragraph (2) the following new para-
7
graph: 
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‘‘(3) LIMITATION ON GOVERNMENT ASSISTANCE 
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TO RUM PRODUCERS.— 
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‘‘(A) IN GENERAL.—If the amount of di-
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rect and indirect government assistance paid or 
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incurred by any covered government during any 
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calendar year to persons producing rum within 
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the jurisdiction of such government exceeds the 
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limitation under subparagraph (B), the amount 
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which would (but for this paragraph) be covered 
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into the treasury of such government under this 
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subsection shall be reduced for each of the 2 
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succeeding calendar years by the amount of 
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such excess. 
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‘‘(B) LIMITATION.—The limitation under 
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this subparagraph is the amount equal to 15 
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percent of the amount which would (but for this 
24
paragraph) be covered into the treasury of such 
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government under this section for the calendar 
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year. 
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‘‘(C) SEPARATE
APPLICATION
TO
EACH 
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PRODUCER.—The provisions of subparagraphs 
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(A) and (B) shall also be applied separately to 
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each rum producer, taking into account only the 
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assistance paid or incurred by any covered gov-
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ernment to such producer and only such pro-
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ducer’s production to which subsection (a)(3) or 
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(b)(3) applies, whichever is applicable. 
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‘‘(D) 
GOVERNMENT
ASSISTANCE.—For 
11
purposes of this paragraph— 
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‘‘(i) DIRECT
GOVERNMENT
ASSIST-
13
ANCE.—The term ‘direct government as-
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sistance’ includes any transfer of funds, 
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grant, subsidy (other than any generally 
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available tax subsidy), loan, equity invest-
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ment, loan guarantee, production or mar-
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keting incentive, income or price support, 
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provision of goods or services (other than 
20
generally available infrastructure and pub-
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lic services), and such other assistance pro-
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vided by a covered government as the Sec-
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retary identifies as consistent with the pur-
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poses of this paragraph. 
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‘‘(ii) INDIRECT GOVERNMENT ASSIST-
1
ANCE.—The term ‘indirect government as-
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sistance’ includes any amounts expended 
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by a covered government— 
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‘‘(I) to promote, market, or oth-
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erwise support the rum industry with-
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in the jurisdiction of such govern-
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ment, 
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‘‘(II) to pay principal and inter-
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est on, and expenses related to, in-
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debtedness incurred, the proceeds of 
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which are used to provide rum sub-
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sidies, or 
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‘‘(III) for any other purpose 
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identified by the Secretary as con-
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sistent with the purposes of this para-
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graph. 
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‘‘(iii) CERTAIN DEBT-FINANCED PAY-
18
MENTS
EXCLUDED.—The terms ‘direct 
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government assistance’ and ‘indirect gov-
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ernment assistance’ shall not include any 
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payment made by a covered government to 
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a rum producer out of funds raised 
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through a loan (including the issuance of a 
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debt instrument), but shall include any 
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payment of principal and interest on the 
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loan (or debt instrument). 
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‘‘(E) ANNUAL
REPORTS.—Each covered 
3
government shall, for each calendar year, sub-
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mit a report to the Secretary detailing the 
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amount and type of direct and indirect govern-
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ment assistance provided by such government 
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to each rum producer during such calendar year 
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and to rum producers in the aggregate during 
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such year. Such report shall be submitted at 
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such time, and in such form, as is prescribed by 
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the Secretary. 
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‘‘(F) COVERED
GOVERNMENT.—For pur-
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poses of this paragraph, the term ‘covered gov-
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ernment’ means the government of Puerto Rico 
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and the government of the Virgin Islands.’’. 
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SEC. 3. MAXIMUM AND MINIMUM ALLOCATIONS OF RUM 
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EXCISE TAXES BETWEEN PUERTO RICO AND 
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THE VIRGIN ISLANDS. 
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Section 7652 of the Internal Revenue Code of 1986 
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is amended by inserting after subsection (h) the following 
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new subsection: 
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‘‘(i) LIMITATIONS ON ALLOCATION OF RUM EXCISE 
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TAXES BETWEEN PUERTO RICO AND THE VIRGIN IS-
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LANDS.— 
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‘‘(1) 
IN
GENERAL.—Notwithstanding 
sub-
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sections (a), (b), and (e), if, without regard to this 
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subsection and subsection (e)(3), the Secretary de-
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termines that the respective shares of Puerto Rico 
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and the Virgin Islands of the aggregate amount to 
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be covered into their treasuries under this section 
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for any calendar year are not within the parameters 
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of paragraph (2), the Secretary shall increase or de-
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crease such shares to the extent necessary to bring 
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them within such parameters. 
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‘‘(2) PARAMETERS.—The parameters of this 
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paragraph are that— 
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‘‘(A) Puerto Rico’s share shall be at least 
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65 percent but not more than 70 percent of 
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such aggregate amount, and 
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‘‘(B) the Virgin Islands’s share shall be at 
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least 30 percent but not more than 35 percent 
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of such aggregate amount. 
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‘‘(3) APPLICATION WITH SUBSECTION (e)(3).— 
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This subsection shall be applied before subsection 
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(e)(3).’’. 
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SEC. 4. DENIAL OF COVER OVER FOR RUM REDISTILLED 
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INTO CANE NEUTRAL SPIRITS. 
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Section 7652 of the Internal Revenue Code of 1986 
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is amended by inserting after subsection (i) the following 
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new subsection: 
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‘‘(j) DENIAL
OF COVER OVER
FOR RUM REDIS-
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TILLED INTO CANE NEUTRAL SPIRITS.—No amount shall 
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be covered over under subsection (a) or (b) with respect 
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to rum which is redistilled into cane neutral spirits after 
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being brought into the United States. The Secretary shall 
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prescribe such information reporting as the Secretary de-
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termines necessary to carry out the preceding sentence.’’. 
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SEC. 5. EFFECTIVE DATE. 
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(a) IN GENERAL.—Except as provided in subsection 
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(b), the amendments made by this section shall apply to 
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calendar years after 2011. 
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(b) DENIAL OF COVER OVER FOR RUM REDISTILLED 
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INTO CANE NEUTRAL SPIRITS.—The amendment made 
18
by section 4 shall apply to rum brought into the United 
19
States after the date of the enactment of this Act. 
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Æ 
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