HR 95 IHCommentsClose CommentsPermalink

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.CommentsClose CommentsPermalink

January 6, 2009CommentsClose CommentsPermalink

Mrs. CHRISTENSEN introduced the following bill; which was referred to the Committee on Ways and MeansCommentsClose CommentsPermalink

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.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Virgin Islands Improvement Act of 2009’.CommentsClose CommentsPermalink

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:CommentsClose CommentsPermalink

‘SEC. 409B. TREATMENT OF DISTRIBUTIONS FROM CERTAIN RETIREMENT PLAN ASSETS INVESTED UNDER A VIRGIN ISLANDS INVESTMENT PROGRAM.

‘(a) In General- If an individual 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--CommentsClose CommentsPermalink





‘(1) as a designated Roth account in the case of qualified retirement savings described in subsection (b)(1), orCommentsClose CommentsPermalink





‘(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.CommentsClose CommentsPermalink





‘(b) Qualified Retirement Savings- For purposes of this section, the term ‘qualified retirement savings’ means--CommentsClose CommentsPermalink





‘(1) amounts attributable to elective deferrals under an applicable retirement plan, andCommentsClose CommentsPermalink





‘(2) amounts held in an individual retirement plan which is not a Roth IRA.CommentsClose CommentsPermalink





‘(c) Virgin Islands Investment Program- For purposes of this section--CommentsClose CommentsPermalink





‘(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).CommentsClose CommentsPermalink





‘(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.CommentsClose CommentsPermalink





‘(3) FEES AND TAXES- A program meets the requirements of this paragraph if--CommentsClose CommentsPermalink





‘(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,CommentsClose CommentsPermalink





‘(B) the program imposes an annual tax (in addition to the fees permitted under subparagraph (A)) equal to 1 percent of the amount designated for management under the program for the life of the account without regard to account balance, andCommentsClose CommentsPermalink





‘(C) the 1 percent tax is imposed notwithstanding the Roth designation.CommentsClose CommentsPermalink





‘(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.CommentsClose CommentsPermalink





‘(5) SEPARATE ACCOUNTING- A program meets the requirements of this paragraph if the program--CommentsClose CommentsPermalink





‘(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, andCommentsClose CommentsPermalink





‘(B) maintains separate recordkeeping with respect to each account.CommentsClose CommentsPermalink





‘(d) Use of 1 Percent Annual Tax-CommentsClose CommentsPermalink





‘(1) REVENUES TO THE VIRGIN ISLANDS DURING FIRST 20 YEARS-CommentsClose CommentsPermalink





‘(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) of the Internal Revenue Code of 1986 (Rum Excise Tax).CommentsClose CommentsPermalink





‘(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--CommentsClose CommentsPermalink





‘(i) the expenditure is pursuant to a qualified infrastructure development plan, andCommentsClose CommentsPermalink





‘(ii) the expenditure is approved by the Secretary of the Interior as being pursuant to such plan.CommentsClose CommentsPermalink





‘(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--CommentsClose CommentsPermalink





‘(i) developed and approved by the committee described in subparagraph (D), andCommentsClose CommentsPermalink





‘(ii) approved by the Governor of the Virgin Islands.CommentsClose CommentsPermalink





‘(D) COMMITTEE- The committee described in this subparagraph is a committee--CommentsClose CommentsPermalink





‘(i) comprised of 5 members, each serving a term of either three or five years--CommentsClose CommentsPermalink





‘(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,CommentsClose CommentsPermalink





‘(II) 2 of whom are appointed by the Virgin Islands legislature, one for a 3-year and one for a 5-year term, andCommentsClose CommentsPermalink





‘(III) 1 of whom is appointed by the Secretary of the Interior for a 5-year term, andCommentsClose CommentsPermalink





‘(ii) with respect to which a vacancy is filled in the manner in which the original appointment was made.CommentsClose CommentsPermalink





‘(2) REVENUES TO THE UNITED STATES AND THE VIRGIN ISLANDS-CommentsClose CommentsPermalink





‘(A) DURING FIRST 20 YEARS- Revenues from the fee referred to in subsection (c)(3)(B) imposed on designated assets after the first 20 years under management by the Virgin Islands Investment Program shall be collected by the United States Treasury in a manner similar to section 7652 of the Internal Revenue Code, upon which half of the proceeds shall be distributed to the Virgin Islands for the first 20 years of management.CommentsClose CommentsPermalink





‘(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.CommentsClose CommentsPermalink





‘(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.CommentsClose CommentsPermalink





‘(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.CommentsClose CommentsPermalink





‘(e) Other Definitions- For purposes of this section--CommentsClose CommentsPermalink





‘(1) ELECTIVE DEFERRALS; APPLICABLE RETIREMENT PLAN- The terms ‘elective deferrals’ and ‘applicable retirement plan’ have the respective meanings given such terms by section 402A.CommentsClose CommentsPermalink





‘(2) VIRGIN ISLANDS- The term ‘Virgin Islands’ means the United States Virgin Islands.CommentsClose CommentsPermalink





‘(3) SECRETARY OF THE INTERIOR- The term ‘Secretary of the Interior’ means the Secretary of the Interior or his designee.’.CommentsClose CommentsPermalink





(b) Clerical Amendment- The table of sections for such part I is amended by adding at the end the following new item:CommentsClose CommentsPermalink





‘Sec. 409B. Treatment of distributions from certain retirement plan assets invested under a Virgin Islands investment program.’.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall take effect on the date of the enactment of this Act.CommentsClose CommentsPermalink