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109TH CONGRESS 
1ST SESSION H. R. 1555
To amend the Internal Revenue Code of 1986 to provide for the cover 
over of the refundable portion of the earned income and child tax credits 
to Guam and the Virgin Islands. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 12, 2005
Ms. BORDALLO (for herself and Mrs. CHRISTENSEN) 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 provide 
for the cover over of the refundable portion of the earned 
income and child tax credits to Guam and the Virgin 
Islands.
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. SHORT TITLE. 
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This Act may be cited as the ‘‘Insular Areas Tax 
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Credit Act’’. 
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SEC. 2. COVER OVER OF REFUNDABLE PORTION OF 
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EARNED INCOME AND CHILD TAX CREDITS 
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TO GUAM AND THE VIRGIN ISLANDS. 
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(a) IN GENERAL.—Section 7654 of the Internal Rev-
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enue Code of 1986 (relating to coordination of United 
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States and certain possession individual income taxes) is 
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amended by redesignating subsection (e) as subsection (f) 
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and by inserting after subsection (d) the following new 
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subsection: 
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‘‘(e) REFUNDABLE PORTION OF EARNED INCOME 
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AND CHILD TAX CREDITS.—
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‘‘(1) IN GENERAL.—In addition to the amounts 
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determined under the preceding provisions of this 
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section, with respect to calendar year 2006 and each 
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calendar year thereafter, the United States shall pay 
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an estimate of the applicable refundable tax credit 
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amount to Guam and the Virgin Islands during the 
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first 31⁄2 months of such calendar year. 
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‘‘(2) 
ADJUSTMENTS; 
SUPPLEMENTAL
PAY-
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MENTS.—Proper adjustments shall be made in 
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amounts transferred under this subsection to the ex-
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tent that prior estimates of the applicable refundable 
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tax credit amount are in excess of or less than such 
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amount. In the case of an estimate which is less 
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than the applicable refundable tax credit amount, 
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the Secretary may make supplemental payments 
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•HR 1555 IH 
which, in the aggregate, do not exceed the difference 
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between such estimate and the applicable refundable 
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tax credit amount. Any adjustment under this para-
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graph shall take into account any such supplemental 
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payment. 
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‘‘(3) APPLICABLE
REFUNDABLE
TAX
CREDIT 
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AMOUNT.—For purposes of this subsection, the term 
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‘applicable refundable tax credit amount’ means, 
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with respect to Guam or the Virgin Islands for any 
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calendar year, the excess of—
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‘‘(A) the aggregate refunds paid by Guam 
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or the Virgin Islands, as the case may be, to in-
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dividuals with respect to taxable years ending in 
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or with the preceding calendar year, over 
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‘‘(B) the aggregate refunds which (as de-
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termined by the Secretary) would have been so 
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paid if section 24(d) did not apply and the 
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credit allowed under section 32 was not refund-
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able.’’. 
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(b) EFFECTIVE DATE.—The amendments made by 
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this section shall take effect on the date of the enactment 
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of this Act.
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Æ