To make residents of Puerto Rico eligible for the earned income tax credit, the refundable portion of the child tax credit, and supplemental security income benefits.

September 25, 2003

Mr. DASCHLE (for Mr. GRAHAM of Florida) introduced the following bill; which was read twice and referred to the Committee on Finance

To make residents of Puerto Rico eligible for the earned income tax credit, the refundable portion of the child tax credit, and supplemental security income benefits.

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 `Puerto Rico Economic Stimulus Act of 2003'.

SEC. 2. PUERTO RICO RESIDENTS ELIGIBLE FOR EARNED INCOME TAX CREDIT.

(a) IN GENERAL- Section 32 of the Internal Revenue Code of 1986 (relating to earned income) is amended by inserting at the end the following new subsection:

`(n) RESIDENTS OF PUERTO RICO-

`(1) IN GENERAL- In the case of residents of Puerto Rico, this section shall be applied--

`(A) by substituting `United States or Puerto Rico' for `United States' in subsections (c)(1)(A)(ii)(I) and (c)(3)(E),

`(B) by substituting `nonresident alien individual (other than a resident of Puerto Rico)' for `nonresident alien individual' in subsection (c)(1)(E), and

`(C) by substituting `gross income (computed without regard to section 933)' for `gross income' in subsections (a)(2)(B) and (c)(2)(A)(i).

`(2) PHASE-IN OF CREDIT-

`(A) IN GENERAL- The credit allowable under this section by reason of this subsection shall not exceed the applicable percentage of the amount of credit which would otherwise be allowable under this section (without regard to this paragraph).

`(B) APPLICABLE PERCENTAGE- The applicable percentage shall be determined as follows:

The applicable percentage is--

10

20

30

40

50

60

70

80

90

100.'.

(b) EFFECTIVE DATE- The amendment made by this section shall apply to taxable years beginning after December 31, 2003.

SEC. 3. REFUNDABLE CHILD TAX CREDIT ALLOWABLE TO RESIDENTS OF PUERTO RICO WITH LESS THAN 3 CHILDREN.

(a) IN GENERAL- Paragraph (1) of section 24(d) of the Internal Revenue Code of 1986 (relating to portion of credit refundable) is amended by inserting at the end the following new sentence: `For purposes of this paragraph, taxable income shall be computed without regard to section 933.'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2003.

(c) APPLICABILITY-

(1) IN GENERAL- Any credit allowable by reason of the amendment made by subsection (a) shall not exceed the applicable percentage of the amount of credit which would otherwise be allowable under section 24(d)(1) (without regard to this subsection).

(2) APPLICABLE PERCENTAGE- The applicable percentage shall be determined as follows:

The applicable percentage is--

10

20

30

40

50

60

70

80

90

100.

SEC. 4. SSI TO APPLY TO RESIDENTS OF PUERTO RICO.

(a) IN GENERAL- Section 1614(e) of the Social Security Act is amended by striking `and the District of Columbia' and inserting `, the District of Columbia, and the Commonwealth of Puerto Rico'.

(b) APPLICATION- Section 1611 of the Social Security Act is amended by adding at the end the following:

`Limitation on Benefits for Residents of the Commonwealth of Puerto Rico

`(j) Notwithstanding any other provision of this title, in the case of an individual who is a resident of the Commonwealth of Puerto Rico who is eligible to receive a monthly benefit under this title, the monthly benefits payable under this title shall not exceed--

`(1) for each month occurring in 2004, 10 percent of the monthly benefits that would, but for the application of this subsection, be paid to the individual under this title;

`(2) for each month occurring in 2005, 20 percent of the monthly benefits that would, but for the application of this subsection, be paid to the individual under this title;

`(3) for each month occurring in 2006, 30 percent of the monthly benefits that would, but for the application of this subsection, be paid to the individual under this title;

`(4) for each month occurring in 2007, 40 percent of the monthly benefits that would, but for the application of this subsection, be paid to the individual under this title;

`(5) for each month occurring in 2008, 50 percent of the monthly benefits that would, but for the application of this subsection, be paid to the individual under this title;

`(6) for each month occurring in 2009, 60 percent of the monthly benefits that would, but for the application of this subsection, be paid to the individual under this title;

`(7) for each month occurring in 2010, 70 percent of the monthly benefits that would, but for the application of this subsection, be paid to the individual under this title;

`(8) for each month occurring in 2011, 80 percent of the monthly benefits that would, but for the application of this subsection, be paid to the individual under this title; and

`(9) for each month occurring in 2012, 90 percent of the monthly benefits that would, but for the application of this subsection, be paid to the individual under this title.'.

(c) TERMINATION OF OTHER PROGRAMS FOR RESIDENTS OF PUERTO RICO-

(1) TITLE I- Title I of the Social Security Act is amended by inserting at the end the following:

`TERMINATION FOR RESIDENTS OF PUERTO RICO

`SEC. 7. This title shall not apply to residents of the Commonwealth of Puerto Rico after 2012.'.

(2) TITLE X- Title X of the Social Security Act is amended by inserting at the end the following:

`TERMINATION FOR RESIDENTS OF PUERTO RICO

`SEC. 1007. This title shall not apply to residents of the Commonwealth of Puerto Rico after 2012.'.

(3) TITLE XIV- Title XIV of the Social Security Act is amended by inserting at the end the following:

`TERMINATION FOR RESIDENTS OF PUERTO RICO

`SEC. 1406. This title shall not apply to residents of the Commonwealth of Puerto Rico after 2012.'.

(4) TITLE XVI- Title XVI of the Social Security Act, as applicable with respect to the Commonwealth of Puerto Rico before the date of the enactment of this Act, shall not apply after 2012.

(d) EFFECTIVE DATE- The amendments made by subsections (a) and (b) shall apply to benefits payable in months beginning on or after January 1, 2004.

END