[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4679 Introduced in House (IH)]
111th CONGRESS
2d Session
H. R. 4679
To amend the Internal Revenue Code of 1986 to assist in the recovery
and development of the Virgin Islands by providing for a reduction in
the tax imposed on distributions from certain retirement plans' assets
which are invested for at least 30 years, subject to defined
withdrawals, under a Virgin Islands investment program.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 24, 2010
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 assist in the recovery
and development of the Virgin Islands by providing for a reduction in
the tax imposed on distributions from certain retirement plans' assets
which are invested for at least 30 years, subject to defined
withdrawals, under a Virgin Islands investment program.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Virgin Islands Improvement Act of
2010''.
SEC. 2. TAX-FREE DISTRIBUTIONS FROM CERTAIN RETIREMENT PLAN ASSETS
INVESTED UNDER A VIRGIN ISLANDS INVESTMENT PROGRAM.
(a) In General.--Part I of subchapter D of chapter 1 of the
Internal Revenue Code of 1986 (relating to pension, profit-sharing,
stock bonus plans, etc.) is amended by adding at the end the following
new section:
``SEC. 409B. TREATMENT OF DISTRIBUTIONS FROM CERTAIN RETIREMENT PLAN
ASSETS INVESTED UNDER A VIRGIN ISLANDS INVESTMENT
PROGRAM.
``(a) In General.--If an individual under the age of 61 makes a
one-time designation of an amount of qualified retirement savings as
being under investment by the Virgin Islands Investment Program for at
least 30 years, then, as of the close of the 10th year, such amount
(and any earnings properly allocable to such amount) shall be treated
for purposes of this title--
``(1) as a designated Roth account in the case of qualified
retirement savings described in subsection (b)(1), or
``(2) as a Roth IRA in the case of qualified retirement
savings described in subsection (b)(2). No amount shall be
includible in gross income by reason of the change in treatment
under the preceding sentence.
``(b) Qualified Retirement Savings.--For purposes of this section,
the term `qualified retirement savings' means--
``(1) amounts attributable to elective deferrals under an
applicable retirement plan, and
``(2) amounts held in an individual retirement plan which
is not a Roth IRA.
``(c) Virgin Islands Investment Program.--For purposes of this
section--
``(1) In general.--The term `Virgin Islands Investment
Program' means a program of the Virgin Islands which meets the
requirements of paragraphs (2), (3), (4), and (5).
``(2) Maximum amount accepted for management.--A program
meets the requirements of this paragraph if the amount accepted
for management under the program does not exceed
$50,000,000,000.
``(3) Fees and taxes.--A program meets the requirements of
this paragraph if--
``(A) the fees charged by investment managers under
the program do not exceed the fees customarily imposed
by investment managers for managing like qualified
retirement savings outside the Virgin Islands
Investment Program,
``(B) the program imposes an annual tax (in
addition to the fees permitted under subparagraph (A))
equal to--
``(i) 1.5 percent of the amount designated
for management under the program for the first
10 years of the account, and
``(ii) 1 percent of the amount designated
for management under the program for the
remainder of the life of the account without
regard to account balance, and
``(C) the 1 percent tax is imposed notwithstanding
the Roth designation.
``(4) Investment manager.--A program meets the requirements
of this paragraph if the investment managers under the program
are chosen by the Governor of the Virgin Islands.
``(5) Separate accounting.--A program meets the
requirements of this paragraph if the program--
``(A) establishes separate accounts for each type
of qualified retirement savings held for the benefit of
each individual and any earnings properly allocable to
such assets, and
``(B) maintains separate recordkeeping with respect
to each account.
``(d) Use of 1 Percent Annual Tax.--
``(1) Revenues to the virgin islands during first 20
years.--
``(A) In general.--Revenues from the tax referred
to in subsection (c)(3)(B) shall be collected, held,
and distributed for the benefit of the Virgin Islands
in a manner similar to section 7652(b) (relating to rum
excise tax).
``(B) Distributions to virgin islands.--Funds and
accrued interest described in subsection (d)(1)(A) may
be paid from escrow to the Virgin Islands for
expenditure only if--
``(i) the expenditure is pursuant to a
qualified infrastructure development plan, and
``(ii) the expenditure is approved by the
Secretary of the Interior as being pursuant to
such plan.
``(C) Qualified infrastructure development plan.--
For purposes of this paragraph, the term `qualified
infrastructure development plan' means a plan for
improving and enhancing the infrastructure of the
Virgin Islands which is--
``(i) developed and approved by the
committee described in subparagraph (D), and
``(ii) approved by the Governor of the
Virgin Islands.
``(D) Committee.--The committee described in this
subparagraph is a committee--
``(i) comprised of 5 members, each serving
a term of either three or five years--
``(I) 2 of whom are appointed by
the Governor of the Virgin Islands, one
for a 3-year and one for a 5-year term,
``(II) 2 of whom are appointed by
the Virgin Islands legislature, one for
a 3-year and one for a 5-year term, and
``(III) 1 of whom is appointed by
the Secretary of the Interior for a 5-
year term, and
``(ii) with respect to which a vacancy is
filled in the manner in which the original
appointment was made.
``(2) Revenues to the united states and the virgin
islands.--
``(A) During first 20 years.--Revenues from the fee
referred to in subsection (c)(3)(B) imposed on
designated assets after the first 10 years under
management by the Virgin Islands Investment Program
shall be collected by the United States Treasury in a
manner similar to section 7652, upon which--
``(i) \1/3\ of the proceeds shall be
distributed to the Virgin Islands for the first
10 years of management, and
``(ii) half of the proceeds shall be
distributed to the Virgin Islands for the next
10 years of management.
``(B) After the first 20 years.--Beginning in the
21st year, the entire 1 percent tax collected shall be
retained by the United States Treasury.
``(C) Minimum holding period.--No withdrawals may
be made by an investor from the account during the
minimum holding period of ten years. Should the
investor choose to withdraw money from the account
during the minimum holding period, the investor would
forfeit the tax advantages of the Fund; any funds
withdrawn would be included in gross income and subject
to Federal income tax, minus payments of the 1 percent
tax.
``(3) Early withdrawal.--Should an investor withdraw the
entire balance of the funds after the 10-year minimum holding
period but before the end of the 30 years, his account will be
liable for the entire 1 percent tax for each of the remaining
years.
``(e) Other Definitions.--For purposes of this section--
``(1) Elective deferrals; applicable retirement plan.--The
terms `elective deferrals' and `applicable retirement plan'
have the respective meanings given such terms by section 402A.
``(2) Virgin islands.--The term `Virgin Islands' means the
United States Virgin Islands.
``(3) Secretary of the interior.--The term `Secretary of
the Interior' means the Secretary of the Interior or his
designee.''.
(b) Clerical Amendment.--The table of sections for such part I is
amended by adding at the end the following new item:
``Sec. 409B. Treatment of distributions from certain retirement plan
assets invested under a Virgin Islands
investment program.''.
(c) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
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