I 
117TH CONGRESS 
1ST SESSION H. R. 4642 
To amend the Internal Revenue Code of 1986 to repeal the limitation on 
the cover over of distilled spirits taxes to Puerto Rico and the Virgin 
Islands, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 22, 2021 
Miss 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 repeal 
the limitation on the cover over of distilled spirits taxes 
to Puerto Rico and the Virgin Islands, and for other 
purposes. 
Be it enacted by the Senate and House of Representa-
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tives of the United States of America in Congress assembled, 
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SECTION 1. COVER OVER OF CERTAIN DISTILLED SPIRITS 
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TAXES. 
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(a) REPEAL OF LIMITATION ON COVER OVER OF 
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DISTILLED SPIRITS TAXES TO PUERTO RICO AND VIRGIN 
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ISLANDS.— 
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•HR 4642 IH
(1) IN GENERAL.—Section 7652 of the Internal 
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Revenue Code of 1986 is amended by striking sub-
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section (f) and by redesignating subsections (g) and 
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(h) as subsections (f) and (g), respectively. 
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(2) EFFECTIVE DATE.—The amendments made 
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by this subsection shall apply to distilled spirits 
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brought into the United States after December 31, 
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2020. 
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(b) REQUIRED TRANSFER TO PUERTO RICO CON-
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SERVATION TRUST FUND OF PORTION OF PUERTO RICO 
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RUM COVER OVER.— 
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(1) IN GENERAL.—Section 7652(a) of the In-
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ternal Revenue Code of 1986 is amended by adding 
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at the end the following new paragraph: 
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‘‘(4) REQUIRED
TRANSFER
TO
PUERTO
RICO 
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CONSERVATION TRUST FUND OF PORTION OF RUM 
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TAXES COVERED OVER.— 
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‘‘(A) IN GENERAL.—From any taxes col-
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lected on rum transported to the United States 
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that are covered into the treasury of Puerto 
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Rico under paragraph (3) at a rate equal to or 
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greater than $10.50 per proof gallon, Puerto 
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Rico shall transfer to the Puerto Rico Con-
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servation Trust Fund an amount per proof gal-
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lon equal to or greater than 1⁄6 of the difference 
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•HR 4642 IH
between $10.50 and the rate, not to exceed 
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$13.25, at which such taxes are covered into 
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such treasury. Puerto Rico’s obligations under 
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this paragraph shall not modify or impair pay-
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ment priorities established under Puerto Rico 
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law and in effect on May 21, 2021. 
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‘‘(B) PUERTO RICO CONSERVATION TRUST 
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FUND.—For purposes of this section, the term 
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‘Puerto Rico Conservation Trust Fund’ means 
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the fund established pursuant to a Memo-
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randum of Understanding between the United 
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States Department of the Interior and the 
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Commonwealth of Puerto Rico, dated December 
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24, 1968.’’. 
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(2) COVER OVER DETERMINED WITHOUT RE-
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GARD
TO
CERTAIN
RATE
REDUCTIONS.—Section 
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7652(h) of such Code, as amended by subsections 
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(a) and (c), is amended by inserting ‘‘(a)(4),’’ after 
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‘‘(a)(3),’’. 
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(3) EFFECTIVE DATE.—The amendments made 
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by this subsection shall apply to articles containing 
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distilled spirits brought into the United States after 
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December 31, 2020. 
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(c) COVER OVER DETERMINED WITHOUT REGARD 
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TO CERTAIN RATE REDUCTIONS.— 
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•HR 4642 IH
(1) IN GENERAL.—Section 7652 of the Internal 
1
Revenue Code of 1986, as amended by subsection 
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(a), is amended by inserting after subsection (g) the 
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following new subsection: 
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‘‘(h) COVER OVER DETERMINED WITHOUT REGARD 
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TO CERTAIN RATE REDUCTIONS.—For purposes of sub-
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sections (a)(3), (b)(3), and (e), the amount of taxes im-
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posed and collected under section 5001(a)(1) shall be de-
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termined without regard to section 5001(c).’’. 
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(2) 
CONFORMING
AMENDMENT.—Section 
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7652(e) of such Code is amended by striking para-
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graph (5). 
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(3) EFFECTIVE DATE.—The amendments made 
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by this subsection shall take effect as if included in 
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section 13807 of Public Law 115–97. 
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(d) DETERMINATION OF AMOUNT OF TAXES COL-
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LECTED.— 
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(1) IN GENERAL.—Section 7652 of the Internal 
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Revenue Code of 1986 is amended by striking sub-
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section (i). 
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(2) EFFECTIVE DATE.—The amendment made 
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by this subsection shall take effect as if included in 
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section 107 of Public Law 116–260. 
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Æ 
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