,i #aacth ,,congress #b;d ,session ,h4 ,r4 #chba ,,in ,,the ,,house ,,of ,,representatives ,january #h1 #bjad,mrs4 ,christensen introduced the following bill2 which was referred to the ,committee on ,ways and ,means ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf 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 #cj years1 subject to defined withdrawals1 under a ,virgin ,islands investment program4 #a4 ,short title ,this ,act may be cited as the ,derek ,m4 ,hodge ,virgin ,islands ,improvement ,act of #bjac4 #b4 ,tax-free distributions from certain retirement plan assets invested under a virgin islands investment program 7a7 ,in general ,part ,i of subchapter ,d of chapter #a of the ,internal ,revenue ,code of #aihf 7relating to pension1 profit-sharing1 stock bonus plans1 etc47 is amended by adding at the end the following new section3 #dji;,b4 ,treatment of distributions from certain retirement plan assets invested under a virgin islands investment program 7a7 ,in general ,if an individual under the age of #fa 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 #cj years1 then1 as of the close of the #ajth year1 such amount 7and any earnings properly allocable to such amount7 shall be treated for purposes of this title-- 7#a7 as a designated ,roth account in the case of qualified retirement savings described in subsection 7b77#a71 or 7#b7 as a ,roth ,,ira in the case of qualified retirement savings described in subsection 7b77#b74 ,no amount shall be includible in gross income by reason of the change in treatment under the preceding sentence4 7b7 ,qualified retirement savings ,for purposes of this section1 the term qualified retirement savings means-- 7#a7 amounts attributable to elective deferrals under an applicable retirement plan1 and 7#b7 amounts held in an individual retirement plan which is not a ,roth ,,ira4 7c7 ,virgin islands investment program ,for purposes of this section-- 7#a7 ,in general ,the term ,virgin ,islands ,investment ,program means a program of the ,virgin ,islands which meets the requirements of paragraphs 7#b71 7#c71 7#d71 and 7#e74 7#b7 ,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 #ej1jjj1jjj1jjj4 7#c7 ,fees and taxes ,a program meets the requirements of this paragraph if-- 7,a7 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 ,program1 7,b7 the program imposes an annual tax 7in addition to the fees permitted under subparagraph 7,a77 equal to-- 7i7 #a4e percent of the amount designated for management under the program for the first #aj years of the account1 and 7ii7 #a percent of the amount designated for management under the program for the remainder of the life of the account without regard to account balance1 and 7,c7 the #a percent tax is imposed notwithstanding the ,roth designation4 7#d7 ,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 ,islands4 7#e7 ,separate accounting ,a program meets the requirements of this paragraph if the program-- 7,a7 establishes separate accounts for each type of qualified retirement savings held for the benefit of each individual and any earnings properly allocable to such assets1 and 7,b7 maintains separate recordkeeping with respect to each account4 7d7 ,use of #a percent annual tax 7#a7 ,revenues to the virgin islands during first #bj years 7,a7 ,in general ,revenues from the tax referred to in subsection 7c77#c77;,b7 shall be collected1 held1 and distributed for the benefit of the ,virgin ,islands in a manner similar to section #gfeb7;b7 7relating to rum excise tax74 7,b7 ,distributions to virgin islands ,funds and accrued interest described in subsection 7d77#a77;,a7 may be paid from escrow to the ,virgin ,islands for expenditure only if-- 7i7 the expenditure is pursuant to a qualified infrastructure development plan1 and 7ii7 the expenditure is approved by the ,secretary of the ,interior as being pursuant to such plan4 7,c7 ,qualified infrastructure development plan ,for purposes of this paragraph1 the term qualified infrastructure development plan means a plan for improving and enhancing the infrastructure of the ,virgin ,islands which is-- 7i7 developed and approved by the committee described in subparagraph 7,d71 and 7ii7 approved by the ,governor of the ,virgin ,islands4 7,d7 ,committee ,the committee described in this subparagraph is a committee-- 7i7 comprised of #e members1 each serving a term of either three or five years-- 7,i7 #b of whom are appointed by the ,governor of the ,virgin ,islands1 one for a #c-year and one for a #e-year term1 7,,ii7 #b of whom are appointed by the ,virgin ,islands legislature1 one for a #c-year and one for a #e-year term1 and 7,,iii7 #a of whom is appointed by the ,secretary of the ,interior for a #e-year term1 and 7ii7 with respect to which a vacancy is filled in the manner in which the original appointment was made4 7#b7 ,revenues to the united states and the virgin islands 7,a7 ,during first #bj years ,revenues from the fee referred to in subsection 7c77#c77;,b7 imposed on designated assets after the first #aj years under management by the ,virgin ,islands ,investment ,program shall be collected by the ,united ,states ,treasury in a manner similar to section #gfeb1 upon which-- 7i7 #bf4fg percent of the proceeds shall be distributed to the ,virgin ,islands for the first #aj years of management1 and 7ii7 half of the proceeds shall be distributed to the ,virgin ,islands for the next #aj years of management4 7,b7 ,after the first #bj years ,beginning in the #bast year1 the entire #a percent tax collected shall be retained by the ,united ,states ,treasury4 7,c7 ,minimum holding period ,no withdrawals may be made by an investor from the account during the minimum holding period of ten years4 ,should the investor choose to withdraw money from the account during the minimum holding period1 the investor would forfeit the tax advantages of the ,fund4 ,any funds so withdrawn would be included in gross income and subject to ,federal income tax1 minus payments of the #a percent tax4 7#c7 ,early withdrawal ,should an investor withdraw the entire balance of the funds after the #aj-year minimum holding period but before the end of the #cj years1 his account will be liable for the entire #a percent tax for each of the remaining years4 7e7 ,other definitions ,for purposes of this section-- 7#a7 ,elective deferrals2 applicable retirement plan ,the terms elective deferrals and applicable retirement plan have the respective meanings given such terms by section #djb;,a4 7#b7 ,virgin islands ,the term ,virgin ,islands means the ,united ,states ,virgin ,islands4 7#c7 ,secretary of the interior ,the term ,secretary of the ,interior means the ,secretary of the ,interior or his designee4 4 7b7 ,clerical amendment ,the table of sections for such part ,i is amended by adding at the end the following new item3 ,sec4 #dji;,b4 ,treatment of distributions from certain retirement plan assets invested under a ,virgin ,islands investment program4 4 7c7 ,effective date ,the amendments made by this section shall take effect on the date of the enactment of this ,act4